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Intrawest explores strategic options

Company focused on how to finance growth and continued success

It will be business as usual at Whistler-Blackcomb following an announcement this week that Intrawest has begun a strategic review of the company.

"Regardless of the outcome we have two great mountains and all of our employees, and we are going to be in business well into the future doing what we have done since 1966," said Dave Brownlie, executive vice president and chief operating officer at Whistler-Blackcomb.

"We will continue to do that so (the review) really will have very little impact on us in the near term and quite frankly, in terms of our base business, for years to come."

The review will also have little or no impact on employees in the short term said Brownlie.

His comments followed the public announcement by Intrawest Tuesday morning, before stock markets opened, that the company was initiating a review of strategic options available to the company for enhancing shareholder value, including, but not limited to a capital structure review, strategic partnerships or business combinations.

The company retained Goldman, Sachs & Co to assist in the review.

"The reality is that this is a process that will take some time," said Brownlie.

"The outcome of that process, quite frankly may be status quo, or it may be a very strong strategic alignment and partnership or a business combination that will in fact help us take Whistler-Blackcomb and the rest of Intrawest to the next level, which obviously would be of tremendous benefit to Whistler-Blackcomb and to the community."

Analysts pointed to rapid growth of the company and challenging years for some of the company’s ski resorts as a couple of the root causes of the review.

However, Brownlie said Whistler’s difficult winter last year was not a catalyst to the review.

"In fact although Whistler-Blackcomb had a challenging year last year the reality is we still hosted the most skier visits out of any resort in North America," said Brownlie.

"This year we are on track to do 2 million visits and again we will be the largest resort in North America.

"Whistler-Blackcomb is a tremendous asset for Intrawest and it will continue to be."

Intrawest chief executive Joe Houssian said the company is at a "pivotal point in its evolution," particularly given the acquisition of the luxury adventure travel business Abercrombie and Kent.

Intrawest also posted a $69.3 million-US second quarter profit, lifting it from a loss of $7.1 million in the year-earlier period.

And Whistler-Blackcomb will host the sliding and alpine events during the 2010 Winter Olympics Games in Whistler and Vancouver.

For as long as there have been rumours in Whistler the one about Whistler and Blackcomb being sold has been circulating. But Brownlie said there is nothing to substantiate those rumours.

"(It has been) reiterated by our chairman that we are looking at Intrawest in total," he said.

Houssian told Reuters that "…our objective isn’t to sell off our assets. Our objective is to grow our assets and build our business."

Acting Whistler Mayor Gordon McKeever, while cautious in his response, said he was hopeful that changes, if any, would not affect the relationship between the municipality and Whistler-Blackcomb.

"Intrawest has been a strong member of our resort community in Whistler for many years, both as a development company and in their excellent operations of Whistler-Blackcomb," he said.

"If all, or parts, of this company were to experience changes in ownership, we would hope the new principals have as much respect and understanding of our community's vision and plans as Intrawest has displayed.

"Our community's interests are clearly articulated in Whistler 2020 – The Comprehensive Sustainability Plan. As one deals with a business over time, whether privately held or publicly traded, the probability exists of changes in corporate structure or ownership. Intrawest and Whistler-Blackcomb have been strong partners in the past. We are confident that any corporate restructuring will lead to continued positive relationships in the future."

Many in Whistler believe the community is poised to enter a period of renewal, with focuses in tourism changing to a more encompassing experience. The review at Intrawest may be tied into that, said local businessman Scott Carrell.

"I think that there is a likelihood that they are recognizing that the world has changed and really the product of skiing is 20 years old and it is time for a fresh product," said Carrell, of Affinity Sports, the largest independent equipment rental operation in Whistler.

"It is not just Intrawest, it’s the whole ski product. People want more, they want to be entertained, educated, they want more than what is currently being offered and we are seeing the beginnings of what will be major changes in the community already."