Ascent Entertainment Group Inc.'s pending sale of its Denver sports teams and arena may not be a done deal quite yet.
One of Ascent's (Nasdaq:GOAL) largest outside shareholders may decide as early as this week to take action to try to halt the deal, as rumors of other bidders swirl around Denver.
In a filing with the Securities and Exchange Commission last week, Snyder Capital Management Inc. argued that the $400 million purchase price was as much as a $150 million too low. The filing went on to charge apparent conflicts of interests in Ascent's conduct of the deal.
Ascent, which plans to sell the Pepsi Center, Denver Nuggets and Colorado Avalanche to Bill Laurie, whose wife is heir to the Wal-Mart Inc. (NYSE:WMT) fortune, declined comment through a spokeswoman.
The Ascent sales price has been a topic of controversy in the sports business world with some industry experts complaining the price was too low. But others, including sources who looked at the assets, have told Street & Smith's SportsBusiness Journal that $400 million was what the market was willing to pay. Ascent President Charlie Lyons said last month: "Even my golden retriever who is blind and deaf and 18 years old knew they were for sale."
Because Ascent is trying to complete the Laurie deal by June 30, shareholders need to act expeditiously to block the transaction, said Alan Snyder, president of Snyder Capital Management, which owns 12 percent of Ascent's shares.
Snyder has not decided what course of action to take, if any, but one option is a lawsuit. The Ascent-Laurie deal includes a provision that if a restraining order is issued to halt the sale, either party can walk away from the transaction without a financial penalty, Snyder said.
Snyder said he sent a letter May 5 to Ascent's board outlining his arguments but has yet to receive a response. In the letter, and last Tuesday's SEC filing, he argued that Lyons has a conflict because he is taking an equity position in the Laurie group but will not disclose terms of his deal.
Also, Snyder criticized Ascent for hiring Allen & Co. as its investment banker when that firm's partner, Paul Gould, sits on the Ascent board, and for not conducting an auction of the sports assets.
"On the face, it looks very questionable," Snyder said.
Asked what incentive Ascent would have for lowballing itself, Snyder said he did not know.
Snyder has been in touch with other large shareholders, who he says also have expressed concern over the Laurie deal.
Snyder Capital owned 1.3 million Ascent shares before it began to buy another 2.3 million shares from March 29 to May 5.
Meanwhile, rumors are moving swiftly through Denver that another bidder could emerge. Before Laurie was officially announced as the buyer, several possible suitors were mentioned, including Colorado Rockies owner Jerry McMorris and Rupert Murdoch's News Corp. (NYSE:NWS).
Street & Smith's SportsBusiness Journal staff writer Liz Mullen contributed to this report.
