Colorado Teams Get a New Owner
Colorado Teams Get a New Owner
Jul. 27, 1999
DENVER (AP) _ A group headed by billionaire banker Donald Sturm purchased the Colorado Avalanche and the Denver Nuggets for $461 million on Tuesday after a Wal-Mart heiress dropped out of an auction for the teams.
The move ended a four-month tug-of-war over Ascent Entertainment Group's efforts to sell the teams and the Pepsi Center arena, due to open next fall.
Sturm, who is a major shareholder in telecommunications giant Level 3 Communications, did not return telephone messages seeking comment.
In a statement, Bill Laurie and his wife, Nancy, an heiress to the Wal-Mart fortune, said they weren't prepared to match the Sturm group's offer, backing out of an open auction set Wednesday that would have pitted the Lauries against the Sturm group.
``While we remain committed to the Denver sports teams as fans, we have made the difficult decision not to pursue ownership further,'' the Lauries said.
The Sturm offer is not subject to the approval of shareholders, an Ascent spokeswoman said.
``We look forward to working with Donald L. Sturm and The Sturm Group to ensure there is a smooth transition of ownership,'' said Chuck Neinas, interim chairman and chief executive officer for Ascent.
In March, the Lauries purchased the Ascent assets for $400 million, triggering two shareholder lawsuits that claimed other potential bidders were not solicited and the teams and arena should have fetched a higher price.
Sturm was part of a group initially rebuffed in favor of the Lauries.
A third suit was filed by a businessman who said the Lauries backed out of an agreement to sell the Avalanche to them for $80 million.
To appease shareholders, Ascent withdrew the planned sale, reopened bids and set up the auction process.
On Monday, Sturm won the right to compete against the Lauries by edging Saudi Princess Thara Al Saud, who offered $450 million, and a group made up of retired Denver Broncos quarterback John Elway, Denver financier Bjorn Erik Borgen and Colorado ski mogul George Gillett, whose bid wasn't disclosed.
Some shareholders said they were satisfied with Sturm's purchase price, while others believed the price could have been higher.
``I think it could have fetched a higher price if the auction were structured differently, if they had not picked just one winner in the first round to go against the Lauries,'' said Ken Goldman, the principal of the Denver-based Entermedia Growth Partners, which has a stake in Ascent.
``But it's nice to get 15 percent premium over the original deal,'' he said. ``Basically it's benefited Ascent shareholders to the tune of north of $1 per share incremental value.''
Marc Ganis, president of Sportscorp, a Chicago-based sports consulting firm, said, ``Five years from now, people are going to look back and conclude that Donald Sturm got a bargain.
``I think right now the assets are worth in the $500 million range plus or minus $20 million, but in four or five years they are going to be worth much more than that.''
The Lauries will receive $8.2 million from Ascent as part of an agreement reached when the bidding process was reopened last month.
Sturm, who lives in Denver but was raised in the New York borough of Brooklyn, started as a tax lawyer. He branched into construction, banking and telecommunications, amassing a diversified portfolio that Forbes magazine valued at about $1.7 billion.
Sturm was a part of an investor group that rescued Continental Airlines from bankruptcy in the 1980s.
Today, he is a major shareholder of Level 3, the Broomfield-based telecommunications giant, and owns a group of nine banks, including the Bank One of Cherry Creek.
``It's a relief,'' Avalanche general manager Pierre Lacroix said. ``The fact that we have leadership as of today and the fact that we're going to be able to sit down and learn Mr. Sturm's philosophy, it's sure going to be great because he's an excellent businessman.''