US media firm InterMedia has reacted angrily to Stan Kroenke’s attempt to trump its bid for Outdoor Channel. In a letter to the board of directors of the Outdoor Channel, InterMedia said that the offer it has on the table for the US cable channel is more attractive and would create a more valuable business than the rival offer from sport and business mogul Kroenke.
Kroenke Sports & Entertainment registered an official bid for Outdoor Channel last week, proposing a deal that would offer shareholders US$8.75 a share, a 16.7% premium to the US$7.50 closing share price the previous day. Outdoor Channel subsequently said the bid would be regarded as a ‘superior proposal’ and due diligence will now commence.
InterMedia’s earlier cash and stock offer is worth US$208 million and KSE’s about US$227 million, but the former maintained its is the better proposal.
“We are aware of your determination to engage in discussions with KSE regarding their conditional proposal to acquire all of the outstanding common stock of Outdoor Channel Holdings,” InterMedia said. “We are writing today to make unequivocally clear our position that the KSE proposal cannot constitute a superior proposal relative to the [InterMedia] cash and stock transaction.”
InterMedia added that its deal could be consummated within two weeks and questioned the method the Outdoor Channel had used to value the Kroenke proposal and in turn rank it the ‘superior offer’. It also said it offered more by way of synergy with Outdoor Channel than KSE.
In its proposal, KSE had argues that its offer was superior because it removed what it termed ‘uncertainties tied to financing’ and offered a better purchase price.
InterMedia concluded its letter to Outdoor Channel: “We are confident that our business combination transaction delivers far greater value to [Outdoor Channel’s] stockholders today than the KSE proposal.”