Department of Justice Forces LBO to Divest Two Resorts

But in the process, the new ski operating company, to be known as the American Skiing Company, will be required to divest two New Hampshire ski resorts--Waterville Valley, near Campton, and Cranmore, located in North Conway.

LBO is the owner of the Sunday River in Maine, Sugarbush in Vermont and Attitash Bear Peak and Cranmore in New Hampshire. S-K-I Ltd. owns Mount Snow/Haystack and Killington in Vermont, Waterville Valley and 51 percent of Sugarloaf USA in Maine.

The divestitures are being required by the Department of Justice to address its concerns with the new company's share of the Massachusetts and southern New England ski and snowboard market.

"Obviously, we're disappointed," said Leslie B. Otten, chief executive officer of LBO Enterprises. "There's no question that Justice is sincere in its desire to keep a strong competitive climate in New England skiing. We share that desire, since competition made us successful. With or without the merger, competition for skiing, snowboarding and other winter recreation is wide open. I was surprised that industries involved with totally discretionary consumer spending are being targeted for this type of regulation."

Otten noted that the federal government had greatly stepped up antitrust action in recent months, and cited June 10, 1996 articles in Time and Business Week detailing recent Justice Department and Federal Trade Commission actions in mergers related to industries as diverse as cable television and snack foods.

Otten said that the divestiture will not impact the American Skiing Co.'s ability to meet its short- and long-term goals of attracting more skiers and snowboarders to the sport and developing New England as an international winter sports destination. But he expressed profound disappointment on behalf of the communities which surround Cranmore and Waterville Valley.

"Both resorts had undergone financial problems in the past few years, so our involvement with these resorts was warmly welcomed by the employees and the towns," Otten said. "Both resorts have been brought back to profitability. We invested millions of dollars into Cranmore, and S-K-I Ltd. did a great job getting Waterville Valley moving again. To shift gears at this point is hard on the communities and hard on us. The good news is that both resorts are strong and viable again, and some very accomplished ski industry professionals have already expressed interest in both. I'm confident that we'll be able to find buyers who share our belief in the resorts and their communities."

Otten purchased Cranmore less than one year ago. S-K-I Ltd. purchased Waterville Valley prior to the start of the 1994-95 ski season.

The merger is slated for completion on June 29. Under the terms of the consent decree, the American Skiing Co. has 180 days (which may be extended an additional 90 days, at the option of the Department of Justice) to complete the divestiture. The American Skiing Co. will operate Cranmore and Waterville Valley until they are sold.

CONTACT:

LBO Enterprises

Skip King, 207/824-3000

[email protected]