Outdoor Life: Ex-Suitor Challenges MergerCalif. Firm Claims Offer Was Better 3/03/2013 7:00 PM Eastern
Two weeks before its proposed merger with InterMedia Partners is put to a vote in a special meeting with stockholders, Outdoor Channel Holdings is fighting back at accusations from a disgruntled former suitor.
UTR LLC, a Beverly Hills, Calif., private-equity firm that represents unidentified “high-net- worth individuals,” sent a letter to Outdoor Channel’s board of directors on Feb. 12, claiming the company ran a flawed auction process and that its pending merger agreement with Inter- Media is not in the best interest of shareholders. According to a report last week in the New York Post, UTR said it had a competing offer from a group of “Hollywood heavy hitters” that would top the deal with InterMedia. UTR also claimed in the letter to own about 2% of Outdoor Channel stock, or about 550,000 shares.
According to a statement, UTR called for an immediate halt to the merger, adding that the InterMedia deal does not represent the best deal for shareholders.
UTR’s chances of successfully blocking the deal are slim — Outdoor Channel founders Perry and Thomas Massie, who own about 36% of the company’s outstanding stock, have already said they would vote in favor of the deal.
According to a Feb. 25 Securities & Exchange Commission filing, Outdoor Channel said in a Feb. 22 discussion with proxy advisory firm Institutional Shareholder Services (ISS) that it disclosed it had “participated in discussions regarding a potential transaction with a group that included UTR” prior to entering into its InterMedia deal. In addition, Outdoor disclosed that the UTR group is referred to as “Party A” in its proxy statement filed with the SEC on Feb. 13.
According to that proxy, Party A had made several proposals to Outdoor, including cash offers valued at between $7 and $7.50 per share. But after repeated requests to UTR divulge its sources of financing went unanswered, Outdoor moved on to other potential suitors.
“[A]fter nine months of repeated requests to UTR for a firm proposal with details on its proposed equity and debt financing, the UTR related group never submitted a firm proposal,” Outdoor said in the most recent filing.
“The Board of Directors of Outdoor Channel has reviewed UTR’s letter and the related media reports and believes that the proposed transaction with [InterMedia] is in the best interests of Outdoor Channel and its stockholders,” the company said in the most recent filing.
On Feb. 26, ISS recommended that shareholders vote for the merger . A special meeting of shareholders to vote on the deal is scheduled for March 13.