Utah Company Gains Control of Mt. Bachelor

Although Powdr Corp. obtained about 58% of the outstanding shares, it was really a more impressive feat, because its competitor, The Pape Group of Eugene, already owned 23% of the company, or about 318 shares. So in gaining its majority, Powdr Corp. received commitments from the owners of 75% of the shares not owned by The Pape Group, which had offered between $1,000 and $5,000 more per share with the goal of keeping ownership in the hands of Oregonians. Last week, The Pape Group upped its offer by another $1,000 on each end in a last ditch effort to retain control, but it was apparently too late to change the minds of the board members, who own a preponderence of the shares that will give Powdr its victory. That being the case, it's apparent that Randy Pape, the former president and CEO of the resort until he resigned in Mid-February to focus on the buyout, didn't have too many allies within the company.

A Powdr Corp. official could not be reahced for comment Tuesday morning. Says Tim Clevenger, director of business development for The Pape Group, "Four directors made a decision that will cost all shareholders a lot of money."Mt. Bachelor's secretary and general counsel Jim Petersen tells GlobeSt that Powdr will now have complete control over the board and its makeup, which means it will be able to approve the merger and force all shareholders--not just those that have already committed--to tender their shares. The only recourse for The Pape Group and other shareholders who didn't accept Powdr's offer is to dissent or vote no against the merger. Such an action won't prevent them from having to sell, but would force the courts to decide how much Powdr should be paid for their shares, says Petersen.

To finalize the victory, the Mt. Bachelor board of directors--which owns the preponderance of the shares tendered to Powdr--on Monday waived the Oregon Control Share Act, which would have prevented the not-so-hostile takeover by prohibiting Powdr from gaining voting rights along with its new shares. It is believed the deal includes Powdr Corp. assuming some $10 million in debt.

Late last month, Mt. Hood Meadows made its own offer to the board for the resort, but the board voted not to interfere with the competing bids that went directly to shareholders and Mt Hood's owners quickly rescinded their offer. A few weeks prior to that, when Randy Pape was head of the board, the board rejected Powdr Corp's initial offer to buy the resort, prompting Powdr to circumvent the board an go directly to shareholders, which in turn prompted The Pape Group's counteroffer. Pape announced his resignation as president and CEO In mid-February in order to focus on the buyout bid.

To obtain the necessary shares, Powdr Corp. had the support of Beverly Healy, widow of Bill Healy, the founder of Mount Bachelor, as well as the Stevenson family of Bingham, WA and other members of the Healy family. Beverly Healy alone owned 14% of the outstanding shares. It is not clear how many shares the Stevenson family owned or how many shares Healy's children owned, but both groups have spoken in favor of selling their shares to Powdr Corp. It was a special committee of the board comprised of Beverly Healy, Wallace Stevenson and his brother Rees that solicited the original purchase offer from Powdr Corp.