Burton to Purchase Mad River? — Update 2

Two weeks ago, the Burton team met with CTEC/Doppelmayer and Mad River Lifts to see if there were replacement or new lifts available to replace the aging single chair at Mad River Glen. According to our source, they have been assured that a commitment needs to be in place by May 15th in order to have a replacement installed by mid-December. (Mad River Glen rarely opens before the Christmas week).

As a contingency, the Team feels that the mountain can open with just the existing double chairs from the base area for any early-season skiing. Should negotiations last later than the deadline, the mountain team can utilize the single chair for the 2006-2007 ski season, replacing it during the summer of 2007.

Don’t be…

this Joey.

Burton to Purchase Mad River? — Update

Saturday was the Annual MRG Board Meeting. In February, we posted a story which had been referred to us stating that Jake Burton and a management team had conducted a review of Mad River’s finances with an eye to potentially acquiring the mountain.

Since there was no mention of this issue from the MRG Annual Meeting, we contacted our source for an explanation. Since February, the mountain closed prematurely due to weather issues. We also understand that there have been issues with members of the senior management team. The mountain re-opened, but the season has never come back and the mountain closed for the season last weekend.

The financial results were worse than had been projected in February. Jake’s team have been frustruated with an inability to establish exactly what the projected loss will be for the 2005-2006 season. Such numbers are, of course, crucial to the valuation that they would place on the mountain. In addition, the mountain has not officially communicated the results of either the shareholder petition (to levy a per-share assessment to cover the single chair shortfall) or the Board proposal (to increase the number of authorized shares).

The Burton team is still interested, but they are unable to get a handle on the financial results. As such, they have been unable to offer a firm proposal to the MRG Board. The team has asked Doppelmayer/CTEC (the lift designers) to establish a “drop dead” date for construction of a replacement lift for the 2006-2007 season.