Fibreboard to Sell Its Ski Resort at Big Bear
Fibreboard Corp. tentatively agreed Tuesday to sell its three ski resorts, including the Bear Mountain resort in Big Bear Lake, to a company formed by veteran ski operator George Gillett Jr. for $127 million.
Besides the 690-acre Bear Mountain operation, one of Southern California’s most popular ski resorts, Fibreboard is selling its two resorts at Lake Tahoe in Northern California: Northstar-at-Tahoe and Sierra-at-Tahoe.
Together, they draw more than 1 million skiers a year and comprise the largest ski operation in California. Their proposed purchase is part of an effort by Gillett--who until a few years ago ran the famed Vail and Beaver Creek ski Bresorts in Colorado--to reassume a leading role in the skiing industry.
His profile dipped in 1991 when his privately held firm, Gillett Holdings Inc. of Denver, filed for bankruptcy reorganization. The firm had invested heavily in television stations with the aid of junk bonds underwritten by the now-defunct investment firm Drexel Burnham Lambert Inc., and the debts proved overwhelming.
The Fibreboard sale to Gillett’s new family firm--Booth Creek Inc. in Vail--also would end the seemingly odd marriage of the sexy, highly promotional ski business and the otherwise dull Fibreboard, which mainly manufactures vinyl siding, industrial pipe insulation and other mundane building products.
But Fibreboard, which recently moved its headquarters to Dallas from Walnut Creek, Calif., has run ski resorts since 1972, when it converted its timberlands near Lake Tahoe into the Northstar-at-Tahoe resort.
Its resorts also have been solid contributors to the company’s earnings, and Fibreboard said it wasn’t actively shopping the resorts when Gillett, 57, came calling.
Last year, for instance, ski operations kicked in 24% of Fibreboard’s $34-million operating profit, despite accounting for only 12% of its $381 million in sales.
The ski resorts are “a good business with a good return on capital and showing good growth,” said John Stanley, who follows Fibreboard for the investment firm Dillon, Read & Co. in New York. “But the company has shown that everything is for sale at the right price.”
Fibreboard said it decided to shed the resorts to buy other companies in the building-products industry, and Wall Street applauded the move. The company’s stock jumped $1.25 a share, to a 52-week high of $32, on the American Stock Exchange.
At an elevation of 8,000 feet, Bear Mountain is located 70 miles east of Los Angeles in the San Bernardino Mountains. It features 35 downhill trails, 11 ski lifts and a nine-hole golf course. Fibreboard had bought Bear Mountain only last October from SKI Ltd. for $18 million.
Gillett’s sons, Geordie and Alexander, who are managing directors of Booth Creek, said in a telephone interview that they signed the letter of intent to purchase the Fibreboard properties after recently acquiring resorts in New England.
The Gilletts said they plan to keep the California resorts’ current management, led by Bill Jensen, and that their goals include boosting Bear Mountain’s summer business, perhaps by offering mountain biking.
