The bidding war for the cable channel is coming to a head with Kroenke Sports & Entertainment up to $10.25 a share — about $265M — moving ahead of InterMedia Outdoor Holdings’ $9.75. The new offer is higher than the stock’s closing price today of $10.14. No surprise that the Outdoor Channel board now recommends that shareholders vote for this deal at a meeting that the company says it expects to hold next week. InterMedia faces new hurdles if it wants to come back with a higher offer: According to the terms of Outdoor’s amended agreement with Kroenke, the company must let shareholders vote on the Kroenke offer — even if the board switches its recommendation. Executives and board members who control 41% of the shares have committed to support Kroenke no matter what. What’s more, if Kroenke loses then Outdoor will have to pay a $7.5M break-up fee, up from the previous $1M. In November directors agreed to accept cash or stock valued at $8.00 from InterMedia. The company switched sides in March when Kroenke came in with an $8.75 offer. InterMedia appeared to back away, but returned on April 30 offering $9.15. Last week Kroenke was back at $9.35, quickly followed by InterMedia’s $9.75. InterMedia owns The Sportsman Channel and 15 magazines including Guns & Ammo and Petersen’s Hunting.
The only surprise here it that it took the cable channel so long to make the decision. Investors were scheduled to meet tomorrow to vote on Kroenke Sports & Entertainment‘s $9.35-a-share acquisition offer — even though Outdoor Channel said yesterday that it now prefers InterMedia Outdoor Holdings’ $9.75 bid, worth about $252M. Kroenke has until Thursday to sweeten its price. Still, the company wouldn’t say yesterday that it would put off tomorrow’s vote. That changed this morning with an announcement that shareholders would be best served if the vote is postponed “until after May 9, 2013.” Kroenke also “has agreed to the adjournment of the special meeting” Outdoor Channel says. Its investors continue to bet that the company controlled by real estate and sports mogul Stanley Kroenke will return with a higher price. The stock is trading this morning at $10.08 a share, up 9 cents. But InterMedia also has a strong incentive to win the bidding war. Outdoor Channel would complement its existing properties which include The Sportsman Channel and 15 magazines including Guns & Ammo and Petersen’s Hunting.