Apollo ups Great Wolf offer to outbid rival

Sun Apr 8, 2012 3:57pm EDT
 
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By Greg Roumeliotis

NEW YORK (Reuters) - Private equity firm Apollo Global Management LLC APO.N raised its cash offer to buy Great Wolf Resorts Inc WOLF.O by 35 percent to $225.7 million, outbidding a rival for North America's largest operator of indoor water parks.

Great Wolf said in a statement late on Friday it had agreed to amend its previous agreement with Apollo after the private equity firm, headed by billionaire Leon Black, raised its offer to $6.75 per share in cash from $5.

The new deal came after private equity group KSL Capital Partners LLC, which focuses on travel and leisure businesses, offered to buy Great Wolf for $6.25 a share in cash on Wednesday in a hostile bid.

Great Wolf's popularity as a drive-to family vacation has shielded it from slow economic growth and relatively weak consumer confidence, making it hot property in the eyes of buyout firms looking for assets with strong cash flows.

In 2011, its earnings before interest, tax, depreciation and amortization close to doubled year-on-year to $83 million.

As part of the new deal, Great Wolf said it agreed to increase the termination fee and expense reimbursement payable to Apollo from a total of up to $7 million to a total of up to $9 million.

Apollo's revised tender offer runs till midnight on April 20. As of April 5, 1.5 million Great Wolf shares had been validly tendered and not validly withdrawn, the company said. It has 33.43 million shares outstanding, according to Thomson Reuters data.

Great Wolf has been trying to convince its shareholders not to hold out for a better deal, arguing it had been looking at strategic alternatives for more than nine months before the deal with Apollo, reaching out to 38 prospective bidders. Its shares last traded at $6.58.   Continued...