Tuesday Trends sample: Great Wolf rising, U.P. utility project mixed and Veridian Homes falling
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Great Wolf: If some shareholders of the Madison-based waterpark resort chain were disappointed in the initial sale price of the company last month, the developments since then may have alleviated those feelings. New York-based Apollo Global Management announced a plan in March to take over Great Wolf for $157.8 million, or $5 per share. At least one prominent investor said that price was too low, and Denver-based KSL Capital Partners jumped into a bidding war with Apollo shortly thereafter. KSL eventually offered $7.25 per share, but Apollo came back with an offer of $7.85 per share. Great Wolf's board unanimously approves that offer, advising KSL that it would not consider further offers. A UW-Madison economist calls the rampant increase in price "highly unusual." Meanwhile, Great Wolf's stock price ends last week at $8.06, an 8.6 percent jump over Thursday's price following news of the takeover agreement with Apollo.
U.P. utility project: Pewaukee's American Transmission Company announces plans to construct a series of new power lines running between Green Bay and Michigan's Upper Peninsula, but a utility watchdog group is already expressing concerns about the proposal's impact on Wisconsin ratepayers. The new lines -- which could cost just shy of $900 million -- would respond to a blackout last summer that impacted parts of northern Wisconsin and much of the U.P., and the ATC proposal would require about $700 million from Wisconsin's utility customers. The utility says Wisconsin would see benefits from the new line and cautions that a blackout initiated farther south along the current power line would have impacted much more of the Badger State last year. But the Citizens Utility Board charges that Wisconsin ratepayers would be footing the bill for a project that largely benefits Michigan. The group's executive director suggests that the U.P.'s mining operations should pay for the lines since they appear to be the project's primary target.
Veridian Homes: The largest homebuilder in Dane County is the subject of a $16.35 million foreclosure lawsuit by Chicago-based Harris Bank, which is seeking payment of mortgage debt from a project in Verona and undeveloped property in Madison. The bank is reportedly seeking a sheriff's auction of those two properties, and could seek more from the court if the proceeds from an auction aren't sufficient to cover the debt. Veridian officials charge that Harris hasn't been willing to negotiate a payment plan for the debt. Regardless, observers say the lawsuit is bad news for local builders and the regional economy as a whole -- particularly if the company has to declare bankruptcy. Veridian laid off about 40 percent of its staff last fall in the midst of a lengthy downturn in the real estate market.