Outdoor Channel has blown off a merger deal with Leo Hindery’s InterMedia Outdoor Holdings and announced plans to sell itself instead to Kroenke Sport & Entertainment in an all-cash deal worth $227 million, or about $8.75 a share.
The company said its board found the latest offer from sports mogul Stan Kroenke constituted a “superior proposal” that it accepted after consultation with outside legal and financial counsel.
The public company had also found itself under fire from shareholders, led by investment firm UTR, which slammed the price of the previous proposal, less money at $8 a share, and what it claimed was an overall lack of transparency in how the deal came about.
“Outdoor shareholders who were not privy to the back-room dealings used to arrive at this agreement should not be forced to take shares in the resulting new company, an entity that will be saddled with significant long-term debt, have little available cash on hand and carry an exposure to a struggling publishing unit,” UTR President Andrew Franklin wrote last week in a letter to the Outdoor Channel board urging the company to halt the transaction.
In a statement Thursday he called the Kroenke offer “superior” and said he’s pleased the Outdoor Channel board is taking steps “to discharge its fiduciary obligations.”
InterMedia owns the Sportsman Channel and Intermedia Outdoors, publisher of Guns & Ammo and Petersen’s Hunting.
Billionaire Kroenke’s Sports & Entertainment holds Colorado sports teams the Denver Nuggets, Colorado Avalanche, Colorado Rapids and NDP Lacrosse, the Pepsi Center and Dick’s Sporting Goods. His wife Anna is the daughter of Wal-mart co-founder Bud Walton.
InterMedia has four days, or until March 12, to sweeten its bid. If not, the deal is done and Outdoor will have to pay Intermedia a $6.5 million breakup fee.
Lazard is serving as exclusive financial advisor to the company.