On Tuesday June 18, Cardrona Alpine Resort signed a conditional agreement to buy the Treble Cone Ski Area. Cardrona is now in a three-month due diligence period before going unconditional on the stunning, but struggling, Treble Cone.
If successful, Treble Cone would be owned and managed by Cardrona Resort — which along with Real Journeys, Go Orange, International Antarctic Centre, and Canyon Food and Brewery is part of the recently formed holding company Wayfare Group.
Treble Cone has some of the most spectacular scenery in New Zealand, and offers challenging runs for seasoned skiers and riders; but has struggled to make financial headway.
Don Fletcher, chair of the Board of Directors for Treble Cone said, “They [Cardrona] approached us with a formal letter of interest three to four weeks ago. I would say they’d been looking at us for a while before that though.”
“From my point of view, we’re an unlisted public company… so there are rules about how we deal with the approach and they are quite formal under the code. So once Cardrona made that approach we had to act on it and make a determination as to whether we put it to the shareholders. In summary we felt it was a good enough deal to put to the shareholders.”
In a letter to shareholders, Fletcher confirmed that Cardrona Alpine Resort Limited (CARL) offered $7 million for the assets for the company and they have “offered each of those company shareholders who are entitled to ski passes at Treble Cone a replacement 20-year ski pass to Cardrona Alpine Resort, Soho Ski Area (when developed), and to Treble Cone. There will be one new ski pass for each current pass. The ski passes will be fully transferable between seasons at the discretion of the pass holder.”
The letter continued, “The Heads of Agreement is subject to conditions including completion of formal documentation, due diligence to be completed by CARL by 30 August 2019, and the Company’s shareholder approval at a special general meeting to be held if due diligence is confirmed by CARL. If the sale and purchase proceeds settlement will be after the 2019 ski season.
“The Board of Treble Cone will engage an external advisor who will provide an independent report to accompany all information which will be provided to shareholders prior to the shareholders’ meeting to assist them in determining whether they consider the sale to be fair and reasonable and to vote according to their own determination.”
When asked how long Cardrona had been eyeing up TC, general manager Bridget Legnavsky laughed, “50 years! No seriously, I think everyone has always talked about it, and the two mountains working together. I don’t think this has come as a surprise. We have obviously sat on it, and thought ‘when the time’s right’, we should look at it. So this has been brewing for many years.”
For Toby Arnott, general manager of Treble Cone, the potential sale wasn’t as clearly on his radar. Did you see this coming? “No. It was news for us.” But Arnott is optimistic and congenial about the future, “We welcome the opportunity and the chance to work with the crew from Cardrona during this due diligence period,” he said.
Legnavsky says the purchase of Treble Cone may have been slightly hastened due to the role of Wayfare. Wayfare is a group holding company that has naturally evolved since Real Journeys purchased Cardrona. As more brands were purchased, it became clear that an umbrella holding group was required, allowing Real Journeys to stick to its knitting.
When asked why Treble Cone had struggled whilst Cardrona had thrived, Legnavsky said she didn’t know why it happened, but that understanding the plight of Treble Cone’s performance was all part of the due diligence study. But she is very optimistic that by bringing Cardrona, Treble Cone, Pringles and Soho Basin together, the brand would be extremely strong. Legnavsky said it’s early days to tell whether one season pass could be purchased to cover both mountains but she did admit that making a workable and affordable solution would be a priority.