Reuters: Global Markets: Great Wolf says KSL bid "superior" to Apollo's

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Great Wolf says KSL bid "superior" to Apollo's Apr 16th 2012, 15:22 By Tanya Agrawal and Sharanya Hrishikesh Mon Apr 16, 2012 11:22am EDT (Reuters) - Great Wolf Resorts (WOLF.O) said its board determined KSL Capital Partners' buyout proposal to be "superior" to Apollo Global Management's (APO.N) offer but its shares fell marginally in premarket trade, indicating investors may want a higher bid. KSL Capital, which focuses on travel and leisure businesses, has offered $7 for each Great Wolf share, as it tries to outbid rival buyout firm Apollo Global. Last month, private equity firm Apollo Global had offered to buy North America's largest operator of indoor water parks for $5 per share, triggering protests from some investors who called it "woefully inadequate." Earlier this month, KSL stepped in with a $6.25 per share offer, sending Great Wolf's shares up 17 percent. Apollo and KSL subsequently raised their bids to $6.75 and $7 per share, respectively. Last month, Great Wolf said it accepted Apollo's bid as the best after exploring strategic alternatives for nine months and reaching out to 38 prospective bidders. However, many feel that the company can attract higher offers from potential buyers. Last week, Great Wolf's largest investor, HG Vora Capital, recommended shareholders reject Apollo's bid, as the hedge fund expects higher offers. Neuberger Berman Multi-Cap Opportunities Fund .NMULX. portfolio manager Richard Nackenson valued the stock at $8 to $9 per share, based on an analysis of 2013 free cash flow. "When there is an opportunity to refinance some of the higher cost debt, we can see a higher valuation. These factors demonstrate that there is potential for more value here", he said. Great Wolf said in a statement it has provided a written notice to Apollo it is prepared to terminate the merger agreement. Apollo now has the right to make adjustments within three business days and the subsequent offer must be no less favorable than the KSL proposal, Great Wolf said. A decision on the proposals will be made at the conclusion of the three business days and Great Wolf said that the board is not making any recommendation at this time with respect to the KSL offer. Great Wolf will have to pay Apollo $9 million, if it accepts a higher offer. Shares of the company closed at $7.43 on Friday on the Nasdaq. They were down marginally at $7.35 before the bell. (This story corrected break-up fee due to Apollo to $9 million from $7 million in paragraph 14) (Reporting by Sharanya Hrishikesh and Tanya Agrawal in Bangalore; Additional Reporting by Sakthi Prasad; Editing by Matt Driskill and Joyjeet Das) Link this Share this Digg this Email Reprints

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