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Outdoor Says Kroenke Deal ‘Superior’

Outdoor Channel’s board of directors has determined that a $227 million last-minute offer to buy the network outright is superior to an earlier deal with InterMedia Partners, telling the parent of the Sportsman Channel that it has until March 12 to sweeten its bid.

Kroenke Sports, owned by billionaire Stan Kroenke, offered $8.75 per share in cash for all outstanding Outdoor shares on Feb. 27, a deal that appears to far outweigh InterMedia’s $208 million bid, which includes a mixture of cash ($8 per share) and stock in a new publicly traded entity.

In a statement March 7, Outdoor said that the Kroenke Sports deal, which has no financing contingencies or other restrictions, “constitutes a superior proposal.”

Outdoor has given InterMedia until March 12 to come up with a better deal. If InterMedia does not best the KSE proposal by that time, “Outdoor Channel expects to terminate the InterMedia Agreement and to enter into the merger agreement with KSE,” the company said.

InterMedia had claimed in a March 4 statement that its deal already was better than KSE’s, because of inherent cost synergies and the ability for shareholders to participate in the future growth of the company via the InterMedia/Outdoor stock.

In a note Friday, SNL Kagan senior analyst Derek Baine wrote that Outdoor’s board “is not buying” that argument, adding that he expected InterMedia to sweeten its bid, noting that the company was under some leverage restrictions.

“In any event, this is unlikely to be the last we have heard from InterMedia,” Baine wrote. “It will likely have to increase its bid if it wants to stay in the running, but whether its balance sheet would enable adding more debt is unclear. Therefore, an increased offer would likely include more stock for Outdoor Channel Holdings shareholders.”