Outdoor Shares Surge On Latest Offer

Stock Up 6%, Investors Gear For Bidding War 5/03/2013 9:35 AM Eastern

InterMedia Partners continued the bidding war for Outdoor Channel Friday, raising the ante once again for the outdoor life network, goosing the stock and giving investors hope that the back-and-forth of the past few days will continue to drive up shares.

InterMedia’s $9.75 per share bid trumps the $9.35 per share offer by rival Kroenke Sports & Entertainment, which in turn was a response to InterMedia’s $9.15 per share all-cash offer, made on April 30.

Already investors are gearing up for a continued bidding war – the stock was up 6% to $10.03 per share in afternoon trading Friday. In an interview, InterMedia managing partner Peter Kern said he still believes his company, the parent of rival outdoor network The Sportsman Channel, is the best fit with Outdoor.

 “Like I said all along, we’re the right owners [for Outdoor],” Kern said. “Hopefully we’re now in a place where I just can’t see how it can be worth this much to anyone but us. But you never know.”

Outdoor, which had been preparing for a shareholder vote on the latest Kroenke Sports proposal, said in a statement that it had received the InterMedia offer and was currently reviewing it.

Officials at Kroenke Sports did not return a request for comment.

Kern admitted that the price of the network is getting high, adding that synergies with InterMedia’s Sportsman Channel and its 15 outdoor lifestyle magazines make its most recent offer worthwhile.

“I thought it was already pricey, now it’s extremely pricey on a standalone basis,” Kern said.

Kern estimated that the current offer represents a 14 times to 15 times cash flow multiple for Outdoor. That compared to an average trading multiple of about 10.8 times cash flow for most media conglomerates, according to an analyst who did not want to be named because he did not cover Outdoor.

“It’s definitely above the comps,” Kern said of the price offered by InterMedia. “It’s rich territory. If we weren’t already in the industry and didn’t have the synergies and someone said ‘Hey, you could buy Outdoor Channel for 14 times EBITDA,’ I’d need that like a hole in the head.”

But Kern stressed that synergies with its Sportsman Channel and its 15 outdoor magazine properties make the price worthwhile to InterMedia.

“We stretched  [the offer] because we can do more with it, because we have synergies, because  the economics work differently,” Kern said.


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