Citing "recent changes in economic conditions" and trouble obtaining the needed capital, American Skiing Co. said Friday that its merger with MeriStar Hotels & Resorts has been called off.
Maine-based American Skiing owns The Canyons ski resort in Park City. When the merger was announced in December, company officials said the move would have little impact on The Canyons employees and patrons.
The two companies would have combined in a tax-free, stock-for-stock transaction and been known as Doral International Inc. It would have had assets of more than $1.2 billion.
The company boards met separately Thursday and voted to terminate the merger plans. The companies also canceled their shareholder meetings set to approve the merger. American Skiing shareholders were to meet Friday. MeriStar's meeting was set for Monday.
"With the recent changes in economic conditions and their resulting impact on the financing necessary to operate the combined company, each company has reached the conclusion that pursuing operations on a stand-alone basis is more attractive to its shareholders than consummation of the merger," said Leslie B. Otten, American Skiing's chairman and chief executive officer.
Reuters reported Friday that the deal hit a bump last month when the terms of the transaction were revised to give MeriStar stockholders fewer shares of American Skiing for each MeriStar share. The revision came after MeriStar reported a wider-than-expected fourth-quarter loss.
The Canyons employs about 1,100 people during its seasonal peak. American Skiing acquired the resort in 1997 and initiated major renovations and additions, including the mid-mountain Red Pine Lodge, the Grand Summit Resort Hotel and Conference Center and the Sundial Lodge.
Had the merger occurred, Doral would have operated, owned and developed Doral-branded, year-round mountain and beach resorts, vacation villages and conference centers. It also would have managed upscale hotels for third-party owners, as well as operate corporate housing under its proprietary BridgeStreet Accommodations brand.
Doral would have had nine premium ski resorts, 23 resort hotels, 246 hotels, 15 golf courses and four conference facilities. The company also would have controlled prime mountain and beach real estate available for future development of more than 14,000 units.
MeriStar, the nation's largest independent hotel management company, operates 231 hospitality and leisure properties. It owns and manages the Hilton Salt Lake Airport hotel.
American Skiing's other major resorts are Steamboat in Colorado; Killington, Mount Snow and Sugarbush in Vermont; Sunday River and Sugarloaf/USA in Maine; Attitash Bear Peak in New Hampshire; and Heavenly in California/Nevada.