Great Wolf Resorts, the Wisconsin operator of indoor waterparks – including a stake in Great Wolf Lodge in Grand Mound – has agreed to be acquired by a New York-based investment company.
An affiliate of Apollo Global Management LLC will acquire the company for about $700 million, including a cash tender offer of $5-a-share for the company’s outstanding shares of common stock. The total deal also includes the assumption of Great Wolf’s debt.
“After a thorough assessment, we concluded that the proposal put forth by Apollo is the best way to maximize value for shareholders, who will receive a substantial and immediate cash premium for their shares,” Great Wolf Chief Executive Kim Schaefer said in a statement Tuesday.
It was not immediately clear how the deal would affect the company’s lodge in Grand Mound. Great Wolf Resorts controls a 49 percent stake in the hotel and indoor waterpark resort, while the Confederated Tribes of the Chehalis owns the rest. A representative of the tribe said it was surprised by Tuesday’s announcement and that the tribe’s attorneys were reviewing all of their contracts with Great Wolf.
“We’re not sure what it means to have new partners,” said Jeff Warnke, a spokesman for the tribe.
Others also seemed caught off guard by the news as several law firms, such as Weiss & Lurie, a class-action and shareholders rights law firm with offices in New York and Los Angeles, announced “investigating possible breaches of fiduciary duty and other violations of law by the board of directors at Great Wolf Resorts, arising from its agreement for Great Wolf to be acquired by an affiliate of asset manager Apollo Global Management.”
Also on Tuesday, Great Wolf said its board approved a shareholder rights plan, known as a “poison pill,” which is a maneuver designed to deter any unsanctioned attempts to take over the company.
Great Wolf said the plan, which kicks in if someone other than Apollo acquires 12.5 percent or more of the company’s stock, is designed to protect the company’s shareholders in the event that someone other than Apollo attempts to buy the company.
Great Wolf’s earnings had recently shown improvement, although it still was reporting quarterly losses. In the fourth quarter of 2011, the company lost $14.4 million, but it lost $29.2 million in the fourth quarter of 2010
Great Wolf Lodge in Grand Mound is a 398-room hotel and 74,000-square-foot indoor waterpark and conference center that opened in 2008. Warnke said the resort employs about 1,300.
Great Wolf issued a statement through Apollo Global that there will be “no material impacts on operations or day-to-day activities.”
The Associated Press contributed to this report.