Vail Resorts Faces Leadership Shakeup Demand From Key Investor

Vail Resorts, Inc. MTN shareholder Late Apex Partners, LLC (LAP) is pushing for a substantial restructuring following its considerable investments in the company.

LAP advocated for immediate steps to resolve what it sees as Vail’s disappointing performance over the past five years.

LAP argued that the company possesses the finest assets and financial potential, but its performance has been unacceptable.

Late Apex Partners criticized Vail for relying on metrics such as “Resort Reported EBITDA,” which they claim do not accurately reflect real value creation. While EBITDA has grown, Vail’s free cash flow has declined, noted the investor.

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Additionally, LAP also flagged the company’s capital allocation approach as lacking focus, highlighting a $2 billion investment since 2019, yet a drop in free cash flow and worsening customer experiences.

LAP argued that the company’s high dividend payout, taking up about 90% of free cash flow, has limited its ability to reinvest in the business.

The investor attributes much of the underperformance to the leadership of CEO Eric Lynch and CFO Michael Korch, recommending the replacement of both to address the decline in shareholder value.

The firm also suggested that Chairman Katz should step down to prevent further damage to his legacy. LAP’s proposed reforms include cutting the dividend by 80%, prioritizing internal reinvestment, and hiring a proven CEO to lead the company’s turnaround.

If implemented, LAP believes these changes could lead to a $400 per share valuation, offering a 140% increase in equity.

Price Action: MTN shares closed higher by 5.58% at $176.00 on Monday.

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