Outdoor Agrees to KSE Acquisition

Deal Expected to Close in Second Quarter

Outdoor Channel said Wednesday that it has entered into definitive merger agreement with Kroenke Sports & Entertainment for $8.75 per share in cash, a deal that values the network at about $227 million.

"Our board of directors has unanimously determined that the proposed all-cash merger with KSE offers superior value for our stockholders," said Outdoor Channel CEO Tom Hornish, in a statement. "We are pleased that Kroenke Sports & Entertainment has agreed to purchase Outdoor Channel."

The KSE offer trumped an earlier $208 million agreement the company had reached with InterMedia Partners, parent of the rival Sportsman Channel back in November. KSE made its unsolicited bid for the channel on Feb. 27, and on March 8 Outdoor said the all-cash deal was superior to InterMedia’s offer of $8 per share in cash and stock in the newly formed company.

Outdoor had given InterMedia four business days (until March 12) to put forth a better proposal, but apparently that did not come. As a result, Outdoor paid InterMedia a $6.5 million break-up fee.

“Following the expiration of this four business-day period, the Outdoor Channel board determined that the KSE proposal continued to constitute a superior proposal and, as a result, immediately prior to entering into the KSE Agreement, Outdoor Channel terminated the InterMedia Agreement,” Outdoor said in a statement.

The transaction, which is expected to be completed in the second quarter, is subject to the satisfaction of customary closing conditions, including the receipt of requisite regulatory approvals and adoption of the KSE Agreement by Outdoor Channel's stockholders. Outdoor Channel's largest stockholders, Perry T. Massie, Thomas H. Massie and their affiliated entities and Outdoor Channel's directors and executive officers, who currently represent a combined ownership of approximately 41% of the Company, each have agreed to vote in favor of the transaction, subject to certain exceptions.

The special meeting of stockholders of Outdoor Channel to adopt the InterMedia Agreement, which was originally scheduled for March 13, and which the Company announced it intended to adjourn to March 22, 2013, has been cancelled.

Lazard is serving as exclusive financial advisorto Outdoor Channel in connection with the transaction. Wilson Sonsini Goodrich & Rosati, P.C. is legal advisor to Outdoor Channel in connection with the transaction. Allen & Company LLC is serving as exclusive financial advisor to KSE in connection with the transaction. Wachtell, Lipton, Rosen & Katz is legal advisor to KSE in connection with the transaction.