MADISON, WI-Raising the bar a second time seems to have done the trick for a bid by New York City-based Apollo Global Management to acquire Great Wolf Resorts Inc., based here. Apollo had offered $5 per share for the company, a total of about $700 million with debt included, but a bidding war pushed Apollo to now offer $7.85 per share, forcing out opposing bidder KSL Capital Partners.
The Denver-based KSL, a competing resort company, said late Friday that it will not submit a higher bid than Apollo’s offer. The Great Wolf board of directors has unanimously approved the takeover, and has recommended that shareholders do the same.
Though Great Wolf has traded at less than $4 per share since 2008, shareholders were aghast at the $5 offer, saying it was too low for a company that has built up a chain of more than 10 indoor water park resorts. Though there have been regional companies that copied the idea, Great Wolf has been the standard for the niche that started about 10 years ago, mostly in northern cities.
However, the economic downturn and resulting slowdown in vacation travel hit the company hard, and the company had to pull back completely on expansion plans. The firm’s stock plunged from $25 per share in 2005 to less than $4 per share in late 2008. The stock was trading at just about Apollo’s purchase offer at noon today.
KSL has not commented on its pullback from its offers. Apollo and Great Wolf had inserted a “poison pill” clause in their deal in case another firm won the bid.
Deutsche Bank Securities Inc. is serving as financial advisor to Great Wolf, and Paul, Weiss, Rifkind, Wharton & Garrison LLP with Young Conaway Stargatt & Taylor LLP are serving as Great Wolf’s legal advisors. Morgan Stanley & Co. LLC, UBS Investment Bank and Nomura Securities International Inc. are serving as financial advisors to Apollo, and Akin Gump Strauss Hauer & Feld LLP is serving as Apollo’s legal advisor.
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