Vail Resorts to Buy Stowe Mountain Resort Operations From AIG -- Update
February 21 2017 - 10:52AM
Dow Jones News
By Ezequiel Minaya and Leslie Scism
Vail Resorts Inc. said it would buy the ski operations of Stowe
Mountain Resort in northern Vermont for about $50 million from the
real-estate business of insurance giant American International
Group Inc.
Vail Resorts will acquire Stowe's ski business, related
infrastructure and machinery and summer season on-mountain
attractions. AIG will retain ownership of most of the Spruce Peak
base area, including Stowe Mountain Lodge, Stowe Mountain Club and
future development rights.
Broomfield, Colo.-based Vail has a strategy of purchasing and
improving ski areas near urban centers as way of increasing
visitors. The Stowe transaction would give the company a foothold
in the populous northeast market.
AIG has been in the real-estate business since 1987 and built
the group into one of the world's largest property investors, with
about $25 billion in assets before the financial crisis.
The transaction is the latest move by AIG to narrow its focus to
core property-casualty and life-insurance businesses. The company
is using proceeds from many of the divestitures to finance an
ambitious two-year plan to return $25 billion to shareholders
through stock repurchases and dividends. As of early February, AIG
was more than halfway to the goal.
The divestiture program began as an effort to repay U.S.
taxpayers for a nearly $185 billion bailout during the 2008-09
financial crisis. AIG fully repaid the government by the end of
2012, and had shrunk to about half it precrisis size in terms of
total assets on its balance sheet. Even as it shrank, AIG remained
one of the world's biggest sellers of insurance to businesses, by
market share.
Now, Chief Executive Officer Peter Hancock is trying to sell
additional businesses, reduce expenses and make changes in the
insurance-product mix in a bid to boost profitability. The
management team is trying to satisfy activist shareholders Carl
Icahn and John Paulson, who in 2015 publicly called for AIG to
break into smaller pieces. Last year, Mr. Paulson and a
representative of Mr. Icahn joined AIG's board.
Earlier this month, Mr. Hancock's plan suffered a setback when
fourth-quarter results badly disappointed, in large part because of
an unexpectedly large $5.6 billion boost to the company's
property-casualty claims reserves. The company also announced that
two profitability targets set for accomplishment by year-end
wouldn't be achieved then.
In another real estate deal, AIG Global Real Estate announced in
November it had completed the sale of the International Finance
Centre Seoul to Brookfield. Terms of the transaction weren't
disclosed.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com and Leslie
Scism at leslie.scism@wsj.com
(END) Dow Jones Newswires
February 21, 2017 10:37 ET (15:37 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
American (NYSE:AIG)
Historical Stock Chart
From Aug 2024 to Sep 2024
American (NYSE:AIG)
Historical Stock Chart
From Sep 2023 to Sep 2024