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Kroenke purchases California company in business merger deal

A good entrepreneur will be able to spot a lucrative business opportunity when it presents itself. Sometimes this will present itself in the form of an opportunity to purchase a company at a good price which leaves room for making a profit from the business merger. One sports and entertainment company believed it found a good opportunity to acquire Outdoor Channel Holdings Inc., which is a cable television network based out of California. The business conversion was agreed upon after the company offered $27 million.

The purchasing company, Kroenke Sports & Entertainment, outbid InterMedia Outdoors Holdings LLC. Kroenke by offering to pay 16 percent more than the stock market value of Outdoor Channel's stock price in early March. This constituted a sale price of $8.75 per share. InterMedia had initially offered either an $8 cash price per share or a mix of $4.46 in cash and 0.443 of a share.

In the end, Outdoor Channel's executives decided that Kroenke's all-cash proposition offered more value for their stockholders. Kroenke is a closely held company who also owns and operates a National Basketball Association team as well as a team in the National Hockey League. Adding Outdoor Channel to the company's umbrella will help to enhance Kroenke's penetration into the sporting market and niche.

When making a large business merger such as this one in California it is wise to make sure all of the legal paperwork is drafted correctly. This will ensure all parties involved in the transaction are protected and that all the terms of the agreement are well understood. It will also help to avoid future lawsuits which could arise from misunderstandings regarding the business conversion.

Source: Bloomberg Businessweek, "Outdoor Channel to Be Acquired by Kroenke for $227 Million," Nick Turner, March 13, 2013

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