KSL Boosts Offer for Great Wolf

It was revealed on Monday that travel and leisure-focused investment group KSL Partners Management has boosted its takeover bid for Great Wolf Resorts WOLF by 12%, taking the offer that is on the table to $230 million. Two days earlier, a revised bid from K-9 Acquisition, an affiliate of Apollo Global Management APO, that values Great Wolf at roughly $222 million, or $6.75 per share. WOLF now intends to go away and read the KSL proposal. For a company that has been faltering of late, Great Wolf is in the enviable position of having more than one suitor, and it now has the luxury of sitting back and deciding which large sum of money it wants to take. On the back of the news, Great Wolf shares moved up 11% to $7.28 in recent trading, beating the latest per-share offering of $7. The stock has been moving up at an impressive rate since the initial offer was made in March. Everyone likes the popular kid in class. APO made its IPO worth $5 per share last month, and KSL topped that bid last week with $6.25. In a report published on March 26, ValuEngine said that it believed WOLF should be trading at $5.9. This makes WOLF 5.27% undervalued. Fair Value indicates what it believed the stock should be trading at today if the stock market were perfectly efficient and everything traded at its true worth. "For WOLF, we base this on actual earnings per share (EPS) for the previous four quarters of -$0.85, forecasted EPS for the next four quarters of -$0.32, and correlations to the 30-year Treasury bond yield of 3.31%. There are an additional 10 firm specific and interest rate related parameters, each playing a role in the valuation analysis." On April 2, JP Morgan said that Apollo Global Management announced that it will invest $50M in Apollo Investment Corp. The investment will be made at AINV's 3/31/12 NAV (estimated to be $8.45). "APO is purchasing approximately $50M of newly issued AINV shares at NAV. The NAV is estimated to be $8.45 as of March 31, 2012. Final purchase pricing will be trued up to actual NAV when it is available. AINV also announced that it has no further plans to raise equity at this time, substantially reducing overhang from a potential dilutive offering. AINV is also waiving all fees associated with the $50M equity raise for one year."