Notable Mergers and Acquisitions of the Day 04/16: (EF) (DRJ) (AVP) (WOLF)

• The Edelman Financial Group Inc. (Nasdaq: EF), entered into a definitive merger agreement with affiliates of Lee Equity Partners, LLC, a private equity firm, to be acquired for $8.85 per share in cash. This represents a premium of 43% over TEFG's closing price Friday of $6.18, and a premium of 33% over TEFG's volume-weighted average closing price over the last 20 trading days.
  
  The Edelman Financial Group Co-Chief Executive Officers Ric Edelman and George Ball, and other members of TEFG's senior management team, will continue in their roles with the Company after completion of the transaction and, pursuant to the terms of the transaction, maintain a significant equity investment in TEFG. Simultaneously with the closing of the transaction, Mr. Edelman will also be selling his 24% direct interest in The Edelman Financial Center, LLC ("EFC"), a 76%-owned subsidiary of TEFG, to an affiliate of Lee Equity Partners on substantially the same terms provided by the existing Limited Liability Company Agreement of EFC.
  
  
  The merger agreement was negotiated on behalf of TEFG by a Special Committee of its Board of Directors composed entirely of independent directors with the assistance of independent financial and legal advisors. Following the Special Committee's unanimous recommendation, TEFG's Board of Directors unanimously approved the merger agreement and has recommended that TEFG's shareholders adopt and approve the merger.
  
  Under terms of the merger agreement, each issued and outstanding share of TEFG's common stock will be cancelled in exchange for the right to receive $8.85 in cash, except for certain shares beneficially owned by management and TEFG employees that will be rolled over and contributed to the new holding company, and shares held by shareholders who properly exercise and perfect appraisal rights.
  
  The merger agreement must be approved by a two-thirds majority of the outstanding shares of TEFG's common stock and by a majority of the outstanding shares of TEFG's common stock held by unaffiliated shareholders. Members of the Company's senior management, who currently own approximately 26% of TEFG's outstanding shares, have agreed to vote their shares in favor of the merger. This voting obligation will terminate if the merger agreement terminates.
  
  The Special Committee will solicit alternative transaction proposals from third parties for a period of 40 days after today subject to extension for an additional 20 days for parties meeting certain additional requirements specified in the merger agreement (a "Go-Shop Party"). To the extent the Special Committee determines that an alternative transaction proposal is superior to the merger with Lee Equity Partners, TEFG may terminate the merger agreement and accept the superior proposal. In such an event, TEFG must pay Lee Equity Partners a customary termination fee that varies in amount depending on whether or not the superior proposal is with a Go-Shop Party. In addition, the merger agreement provides Lee Equity Partners a customary right to match a superior proposal.
  
  The proposed transaction is expected to close in the third quarter of 2012.The merger agreement is subject to certain closing conditions, including the absence of a material adverse effect on TEFG's business or results of operations and the receipt of applicable regulatory approvals. Lee Equity Partners has obtained financing commitments for equity and debt financing in an aggregate amount sufficient to complete the merger.
  
  Following completion of the transaction, TEFG will become a privately held company and its stock will no longer trade on the Nasdaq Stock Market.
  
  Stephens Inc. is acting as financial advisor to the Special Committee, including with respect to the "go shop" process described above, and has delivered a fairness opinion to the Special Committee in connection with the transaction. Vinson & Elkins LLP is acting as legal advisor to the Special Committee. Thompson & Knight LLP is acting as legal advisor to The Edelman Financial Group. Fried, Frank, Harris, Shriver & Jacobson LLP is acting as legal advisor to Lee Equity Partners. Ric Edelman is represented in the transaction by Paul, Weiss, Rifkind, Wharton & Garrison LLP.
  
  
• Dreams, Inc. (AMEX: DRJ), has signed a definitive merger agreement with Fanatics, Inc., a leading online seller of licensed sports products.
  
  The agreement calls for Fanatics to acquire all the outstanding shares of the company for $3.45 per share in cash for an aggregate transaction value of approximately $183 million, taking into account $25 million of outstanding debt. The offer represents a premium of 32.0% over Dreams’ closing share price of $2.61 on April 13, 2012, the last trading day prior to this announcement.
  
  The Board of Directors of Dreams has unanimously approved the transaction, which is subject to customary closing conditions, including the approval of Dreams’ shareholders and regulatory approvals. The transaction is expected to close in the third quarter of 2012.
  
  In conjunction with the acquisition, Fanatics entered into definitive equity financing with Insight Venture Partners.
  
  Jefferies & Company, Inc. acted as the exclusive financial advisor and Roetzel & Andress, LPA served as legal advisor to Dreams. Morgan, Lewis & Bockius LLP served as legal adviser to Fanatics, Inc.
  
  
• Coty Inc., sent a letter to Avon Products, Inc. (NYSE: AVP) reaffirming its interest in the company.
  
  April 16, 2012
  
  Andrea Jung, Chairman and Chief Executive OfficerAvon Products, Inc. 1345 Avenue of the AmericasNew York, NY 10105
  
  Dear Andrea:
  
  Since we first made public our proposal to acquire Avon for $23.25 per share in cash, we have carefully watched the public reaction to the news and your recent announcement of the hiring of a CEO. We continue to believe in the benefits of our proposed acquisition, and remain interested in meeting with you to discuss our proposal, which we will pursue only on a friendly, consensual basis.
  
  We are confident in our ability to finance the acquisition. BDT Capital Partners, LLC has arranged for equity commitments which, together with the equity committed to us by the Joh. A Benckiser companies, total more than $5 billion. Coty has also received a highly confident letter from J.P. Morgan Securities LLC for the debt financing. The equity commitments and debt highly confident letter are subject to conditions, including completion of satisfactory due diligence and execution of definitive financing and merger documentation. We intend to structure our financing to achieve an investment grade credit rating for our debt.
  
  Our current proposal of $23.25 reflects what we know about Avon based on public information as well as our concerns with what we do not know. We do not know the extent of the legal issues such as the Foreign Corrupt Practices Act investigation and related investigations and litigation or the extent of the operational challenges, and we cannot calculate the level of synergies from public SG&A information or the amount we would need to reinvest to fix the operational issues. These are all significant items materially impacting the value of Avon.
  
  At this stage, without being invited to complete due diligence, we have no way of knowing the best price we can ultimately pay to Avon shareholders.
  
  As we have also said before, we are prepared to sign a confidentiality agreement to cover our receipt of confidential information.
  
  We believe strongly that the only reasonable way to reach a conclusion on overall value for your shareholders is to do so in private negotiations, after you have given us access to due diligence. We are proposing that we devote no more than a couple of weeks – at your invitation – in confidential discussions to see if we have a basis for proceeding with a transaction. If we do not, each company can move on, taking its separate course.
  
  I sincerely hope you will agree that your shareholders' interests will be best served by meeting with us to discuss our proposal.
  
  With best regards,
  
  Bart Becht
  
  
• Great Wolf Resorts, Inc. (Nasdaq: WOLF) received a committed offer from KSL Capital Partners to acquire Great Wolf for $7.00 per share in cash, subject to the terms and conditions of the merger agreement provided with the offer.
  
  In consultation with its independent financial and legal advisors, the Great Wolf Board has determined that the KSL Offer constitutes a “Superior Proposal” under the terms of the Agreement and Plan of Merger, dated March 12, 2012, as amended on April 6, 2012, between Great Wolf and affiliates of Apollo Global Management (NYSE: APO).
  
  In accordance with the terms of the Apollo Merger Agreement, Great Wolf has provided written notice to Apollo that Great Wolf is prepared to terminate the Apollo Merger Agreement subject to Apollo’s right to make adjustments, within three business days (prior to 11:59 pm New York City time on April 18, 2012), to the terms and conditions of the Apollo Merger Agreement so that it results in a transaction that is no less favorable to Great Wolf stockholders than the KSL Offer.
  
  There can be no assurance that a transaction with KSL will result, and in accordance with the terms and conditions of the Apollo Merger Agreement, the Great Wolf board has not withdrawn, modified, amended or qualified its recommendation with respect to the tender offer and other transactions contemplated by the Apollo Merger Agreement, and is not making any recommendation at this time with respect to the KSL Offer. Nor has the Great Wolf board approved, adopted, endorsed, recommended, or otherwise declared advisable the KSL Offer, or proposed that the KSL Offer be approved, adopted, endorsed, recommended or otherwise declared advisable. That decision will be made at the conclusion of the three business day period during which Apollo will consider its options pursuant to the Apollo Merger Agreement. The KSL Offer will expire at 5:00 pm New York City time on April 19, 2012.
  
  Deutsche Bank Securities Inc. is serving as financial advisor to the Company, and Paul, Weiss, Rifkind, Wharton & Garrison LLP and Young Conaway Stargatt & Taylor, LLP are serving as the Company’s legal advisors.

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