A Media Bidding War Gets Exciting: Time Warner Inc (NYSE:TWX), Outdoor Channel Holdings, Inc. (NASDAQ:OUTD), Discovery Communications Inc. (NASDAQ:DISCA)

Currently, Outdoor Channel trades at around $8.85 per share. Relative to Kroenke’s offering price of $8.75 per share, this represents a discount of just over 1 percent. Relative to its pre-Kroenke share price of around $8 per share, this represents a premium of nearly 10 percent.

Long-Term Outlook

At this point, current Outdoor Channel investors and potential buyers should position themselves for the eventual acceptance of the Kroenke deal. Given the diversity and character of Kroenke’s other holdings, Outdoor Channel would probably not represent a core component of the man’s business. However, it could be used as a platform for certain out-of-market Nuggets, Avalanche or Rapids games. As such, it might have intrinsic value and could prove attractive as a long-term component of Kroenke’s portfolio. In this case, its utility to investors would be limited.

On the other hand, Kroenke could make some targeted investments in Outdoor Channel Holdings, Inc. (NASDAQ:OUTD) and then choose to execute a partial or full spin-off of the company. Alternatively, he could elect to sell it to another public or private media company. In either case, the newly-polished property could become an attractive play for investors down the road. Since it could offer multiple entry points for keen-eyed investors, a partial spin-off would be particularly attractive.

In sum, the Outdoor Channel bidding war may not provide an immediate return for arbitrage-minded investors. However, the property could significantly increase in value as part of Stan Kroenke’s sports-media empire. If it becomes a vehicle for his three Colorado-based sports teams, this increase could be dramatic. As such, it bears watching over the long term and is on our arbideas.com watchlist.

The article A Media Bidding War Gets Exciting originally appeared on Fool.com and is written by Mike Thiessen.

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