Great Wolf Resorts Inc. (WOLF), which runs 11 resorts in the U.S. and Canada, rose to its highest level since June 2008 after receiving a higher buyout offer than one proposed by Apollo Global Management LLC. (APO)
KSL Capital Partners LLC offered to buy the company for $6.25 per share in cash, Madison, Wisconsin-based Great Wolf said in a statement yesterday after U.S. markets closed. Apollo, based in New York, offered $5 a share on March 13 in a deal valued at $703 million, including the assumption of debt.
Great Wolf said it will consider and evaluate the proposal by KSL, a private-equity firm based in Denver, and had no other comments. Great Wolf rose as much as 14 percent in intraday trading today, the most since the day of Apollo’s bid. It gained 13 percent to $6.42 as of 10:40 a.m. in New York.
Following Apollo’s bid, Great Wolf was sued by shareholders who said the resort owner didn’t obtain the highest possible offer. The lawsuits claimed the company’s own financial adviser, Deutsche Bank Securities Inc., valued it between $3.74 and $7.98 a share.
In its deal with Apollo, run by Chief Executive Officer Leon Black, Great Wolf was required to adopt a shareholders’ rights plan to thwart hostile acquirers and agreed not to solicit other interested parties. It will also pay the buyout firm $5.3 million, and as much as $1.7 million in Apollo’s expenses, if the company accepts a superior offer.
The company owns, manages and licenses family resorts featuring indoor water parks, suite-style rooms, restaurants, spas and arcades. The company started its first Great Wolf Lodge in Wisconsin Dells, Wisconsin, in 1997, and the chain has expanded into eight other U.S. states and Canada.
The company had more than $143 million in cumulative federal tax losses as of Dec. 31, which equate to $1.62 a share of potential future tax benefits.
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