Cardrona offers $7m for Treble Cone

It's understood that shareholders are likely to accept the offer. Photo/Getty Images

The Cardrona Alpine Resort is offering to buy the Treble Cone skifield for $7million, plus 20 years' free skiing for some shareholders.

Treble Cone Investments Ltd board chairman Don Fletcher yesterday released a letter sent to the 59 shareholders on Tuesday.

It confirms Treble Cone has entered into an exclusive and conditional heads of agreement with Cardrona to sell the assets and business.

Cardrona would pay the $7million and also provide those company shareholders who are entitled to Treble Cone ski passes with a replacement 20-year transferable pass for Cardrona, the Soho Ski Area and Treble Cone.

The minority shareholders, who own 40 per cent of the company, were skiers who bought shares 17 years ago to safeguard the skifield's future, and indications yesterday were they would be likely to accept the Cardrona deal.

The owner of 60 per cent of the shares is Queenstown developer John Darby who was not available for comment.

Fletcher, who was a business partner of Darby in Queenstown's Jacks Point development, said it meant ''quite a bit'' to Wanaka to have a ''well capitalised and vibrant'' Treble Cone.

Over the past 10 years, the skifield had made small profits and losses which showed the ''core structural difficulty'' for a small, full-service ski operation, Mr Fletcher said.

''Any profit made is quickly absorbed in repairs and maintenance and some capital expenditure but it doesn't make enough profit to grow organically and buy a new lift, for instance.''

Mr Fletcher said the sale process began about a month ago when Cardrona made a formal approach to Treble Cone, which is an unlisted public company.

''We've negotiated as a board what we think is the best deal we could do with Cardrona,'' he said.

Once Cardrona confirmed due diligence, the offer would be put to shareholders at a special general meeting.

- Otago Daily Times