March 15, 2012

Bernstein Liehhard LLP today announced that it has filed a case in the Delaware Chancery Court relating to the proposed takeover of Great Wolf Resorts, Inc. (“Great Wolf” or the “Company”) by Apollo Global Management, LLC (“Apollo”).  Plaintiffs allege that the Great Wolf Board of Directors has breached their fiduciary duties to Great Wolf shareholders by failing to undertake a process to obtain maximum value and adequately compensate the Company’s shareholders.

On March 13, 2012, Apollo commenced a tender offer to Great Wolf shareholders to purchase all outstanding shares of Great Wolf common stock for $5.00 per share.  Also on March 13, 2012, Great Wolf announced that it had entered into a definitive merger agreement (the “Merger Agreement”) to be acquired by an affiliate of Apollo after the close of the tender offer.  The tender offer is scheduled to close on April 10, 2012.

Plaintiffs allege that the $5.00 offer price is inadequate consideration for Great Wolf shareholders.  Indeed, according to the tender offer documents filed by Great Wolf, the Company accepted Apollo’s offer despite the fact that there was a higher offer for Great Wolf from another party on the table.  Further, the inadequacy of the consideration offered has not been lost on the analyst community.  For example, on March 13, 2012 Richard Nackenson, a portfolio manager for Neuberger Berman Multi-Cap Opportunities Fund, a large shareholder of Great Wolf, in an interview with Bloomberg First Word stated that: $5.00 per share undervalues the Company; based on the 2013 equity free cash flow yield of 12.5% the Company is worth $8.00 per share; and based on EV/EBITA for 2013 the Company is worth $9.00 per share.

The Merger Agreement also contains preclusive deal protection devices that do not benefit the Company or its stockholders, but, instead, benefit Apollo.  For example, pursuant to the Merger Agreement, the Board is prohibited from soliciting or considering competing bids for the Company and was required to adopt a ‘poison pill’ shareholder rights’ plan (which it has done).  The Company must also pay a termination fee of $5.3 million to Apollo if the Great Wolf Board withdraws or alters its recommendation of the proposed transaction.  Apollo also has three business days to match any competing proposal in the event one is made to Great Wolf, thereby chilling any competing bids.  Finally, the Merger Agreement contains a so-called “Top-Up Option” giving Apollo the right, if it acquires over 50% of Company shares, to buy enough new Great Wolf shares at $5.00 for Apollo to obtain 90% ownership.  Such 90% ownership would allow a short-form merger and avoid a shareholder vote.

If you would like a copy of the complaint, are interested in discussing your rights as a Great Wolf shareholder, or have information relating to the matter, please contact Joseph R. Seidman, Jr. at (877) 779-1414 or

Bernstein Liebhard has pursued hundreds of securities, consumer and shareholder rights cases and recovered over $3 billion for its clients.  It has been named to The National Law Journal’s “Plaintiffs’ Hot List” in each of the last nine years.