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Apollo Raises Great Wolf Offer to $7 a Share, Matching KSL

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Apollo Global Management LLC raised its offer for Great Wolf Resorts Inc. to $233.8 million in its third public attempt to buy the water-park operator and win a private-equity bidding contest with KSL Capital Partners LLC.

Apollo’s $7-a-share bid is $2 higher than the original deal it struck with Great Wolf last month. Great Wolf said April 15 that its board received a “committed offer” for $7 a share from Denver-based private-equity firm KSL and that it would terminate a sweetened $6.75 per share agreement with Apollo from April 6 if it didn’t get a better offer by today.

Great Wolf said in a statement that its board unanimously approved New York-based Apollo’s latest offer and believes it “is in the best interest of all shareholders.” The board said shareholders will have until May 2 to decide whether they will tender their shares.

The Madison, Wisconsin-based water-park operator traded at $7.22 in after-market trading after closing in New York at $7.16. The stock traded at $4.19 on March 12, the day before the board approved Apollo’s original offer.

Shareholders sued Great Wolf following Apollo’s initial proposal of $5 a share, claiming Great Wolf didn’t obtain the highest possible offer.

‘Sitting on’ Cash

KSL didn’t immediately respond to an e-mail request for comment.

U.S. leveraged-buyout investors are looking to put to work the $425 billion of unspent capital commitments they had at the end of 2011, according to PitchBook Data Inc., a Seattle-based private-equity research company.

“They are going for targets that don’t seem to be particularly attractive but are relatively still promising,” said Murillo Campello, professor of finance at Cornell University’s Johnson Graduate School of Management. “That’s how I see the war on this resort company,” he said.

Great Wolf operates 11 resorts in the U.S. and Canada with attractions including indoor water parks, restaurants, spas and arcades. The company is getting financial advice from Deutsche Bank AG and legal counsel from Paul Weiss Rifkind Wharton & Garrison LLP and Young Conaway Stargatt & Taylor LLP.

Apollo is being advised by Morgan Stanley, UBS AG, Nomura Holdings Inc. and Akin Gump Strauss Hauer & Feld LLP.

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