UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
(RULE 13D-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT
TO RULE 13D-1(A) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13D-2(A)
Great Wolf Resorts, Inc.
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(Name of Issuer)
COMMON STOCK, $0.01 PAR VALUE
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(Title of Class of Securities)
391523107
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(CUSIP Number)
JASON ADER
HAYGROUND COVE ASSET MANAGEMENT LLC
1370 6TH AVENUE
NEW YORK, NEW YORK 10019
(212) 445-7800
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(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
AUGUST 9, 2006
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
|X|
SCHEDULE 13D
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CUSIP No. 391523107 PAGE 2 OF 10 PAGES
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1 NAME OF REPORTING PERSONS
JASON ADER
(S.S. or I.R.S. Identification No. not applicable)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY NONE
OWNED BY -------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 2,658,700
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9 SOLE DISPOSITIVE POWER
NONE
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10 SHARED DISPOSITIVE POWER
2,658,700
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,658,700
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.72%
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14 TYPE OF REPORTING PERSON
IN
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SCHEDULE 13D
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CUSIP No. 391523107 PAGE 3 OF 10 PAGES
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1 NAME OF REPORTING PERSONS
HAYGROUND COVE ASSET MANAGEMENT LLC
(S.S. or I.R.S. Identification No. not applicable)
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY NONE
OWNED BY --------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 2,658,700
--------------------------------------------------
9 SOLE DISPOSITIVE POWER
NONE
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,658,700
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,658,700
--------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.72%
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14 TYPE OF REPORTING PERSON
HC
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SCHEDULE 13D
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CUSIP NO. 391523107 PAGE 4 OF 10 PAGES
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1 NAME OF REPORTING PERSONS
HAYGROUND COVE FUND MANAGEMENT LLC
(S.S. or I.R.S. Identification No. not applicable) EIN: 81-0587515
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY NONE
OWNED BY --------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 2,658,700
--------------------------------------------------
9 SOLE DISPOSITIVE POWER
NONE
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,658,700
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,658,700
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
8.72%
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14 TYPE OF REPORTING PERSON
HC
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SCHEDULE 13D
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CUSIP NO. 391523107 PAGE 5 OF 10 PAGES
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1 NAME OF REPORTING PERSONS
HAYGROUND COVE ASSOCIATES LP
(S.S. or I.R.S. Identification No. not applicable) EIN: 81-0587520
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (A) [ ]
(B) [ ]
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
WC
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) OR 2(e) |_|
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
DELAWARE
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NUMBER OF 7 SOLE VOTING POWER
SHARES
BENEFICIALLY NONE
OWNED BY --------------------------------------------------
EACH 8 SHARED VOTING POWER
REPORTING
PERSON WITH 2,219,472
--------------------------------------------------
9 SOLE DISPOSITIVE POWER
NONE
--------------------------------------------------
10 SHARED DISPOSITIVE POWER
2,219,472
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,219,472
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
|_|
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.28%
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14 TYPE OF REPORTING PERSON
HC
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PAGE 6 OF 10 PAGES
ITEM 1. SECURITY AND ISSUER.
This statement on Schedule 13D (this "Statement") relates to the common
stock, $0.01 par value ("Common Stock") of Great Wolf Resorts, Inc., a Delaware
corporation (the "Issuer"). The principal executive office of the Issuer is 122
West Washington Avenue, Madison, Wisconsin 53702.
ITEM 2. IDENTITY AND BACKGROUND.
(a), (b) and (c) This Statement is being filed by (i) Jason Ader, an
individual; (ii) Hayground Cove Asset Management LLC, a Delaware limited
liability company ("HCAM"); (iii) Hayground Cove Fund Management LLC, a Delaware
limited liability company ("HCFM"); and (iv) Hayground Cove Associates LP, a
Delaware limited partnership ("HCA" and, together with Jason Ader, HCAM and
HCFM, the "Reporting Persons"). Mr. Ader is the sole member of HCAM, which in
turn is the managing member of HCFM. In addition, HCFM serves as general partner
of (i) certain Delaware limited partnership funds and (ii) HCA, an investment
manager that provides investment and advisory services to certain offshore
entities and individually managed accounts (the limited partnership funds,
offshore entities and managed accounts collectively, the "Client Funds"). None
of the Client Funds is deemed to be a reporting person.
The principal business of each of the Reporting Persons is providing
investment management and advisory services to the Client Funds.
The principal business address and principal office address of each of the
Reporting Persons is 1370 6th Avenue, New York, New York 10019.
(d) and (e) During the past five years, none of the Reporting Persons has
been (i) convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction as a result of which such person
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violation with respect to such laws.
(f) Mr. Ader is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
The Client Funds have purchased in the aggregate the shares of Common Stock
reported in Item 5, which shares are indirectly beneficially owned by the
Reporting Persons. The aggregate amount of funds required by the Client Funds to
acquire the shares of Common Stock was $31,389,741.60, net of commissions. The
funds were provided by working capital of each of the Client Funds.
ITEM 4. PURPOSE OF TRANSACTION.
The Reporting Persons effected the purchase of the shares of Common Stock
by the Client Funds reported in Item 5 in open market transactions because, in
their opinion, the Common Stock is undervalued and represents an attractive
investment opportunity.
Page 7 of 10 Pages
The Reporting Persons have continuously managed shares of Common Stock in
the accounts of the Client Funds for approximately the last 20 months. The
Reporting Persons believe, based upon public filings of the Issuer, that the
Client Funds, in the aggregate, constitute the second largest beneficial owner
of Common Stock.
On August 9, 2006, Bruce Neviaser, Chairman of the board of directors (the
"Board") of the Issuer, called Mr. Ader to elicit Mr. Ader's views regarding a
possible sale of the Issuer. Mr. Neviaser expressed his belief that the Issuer
has a worth of at least $16 per share of Common Stock and sought Mr. Ader's
advice as to which investment banking firm to contact and how best to go about
an organized a sale of the Issuer as a way to maximize the value of the Common
Stock for all shareholders. Mr. Ader expressed his strong support for the
Issuer's engagement of an investment banking firm to explore a sale and stated
that any one of a number of major investment banks could add substantial value
in conducting an organized sale process.
On August 14, Mr. Neviaser called Mr. Ader to inform him that Mr. Neviaser
would, on August 14, be selling 200,000 shares of Common Stock into the market
at prevailing market prices. Nonetheless, Mr. Neviaser reiterated to Mr. Ader
his belief that the Issuer would have a worth of at least $16 per share of
Common Stock upon a sale of the Issuer.
By letter dated August 14, 2006 to the Board, Mr. Ader reiterated the
highlights of his August 9 discussion with Mr. Neviaser and articulated his view
that at this time shareholder value would be maximized by a sale of the Issuer.
He encouraged the Board to take immediate steps to unlock long-term shareholder
value by retaining an investment banking firm to explore the sale of the Issuer.
Mr. Ader noted that the Issuer's two significant earnings shortfalls in 2005
caused serious damage to management's credibility and the Issuer's overall
reputation with investors, resulting in the Common Stock trading at a
significant discount to underlying asset value. Mr. Ader requested a meeting
with the Board to discuss the Reporting Person's views regarding valuation of
the Issuer. A copy of this letter is attached hereto as Exhibit 99.2 and
incorporated herein by reference.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) In the aggregate, the Client Funds are the direct beneficial owners of
2,658,700 shares of Common Stock currently indirectly owned by the Reporting
Persons, or approximately 8.72% of outstanding shares of Common Stock of the
Issuer, based upon 30,485,308 shares of Common Stock outstanding as of August 4,
2006, as reported by the Issuer in its Quarterly Report on Form 10-Q for the
quarter ended June 30, 2006. None of the Client Funds own individually in excess
of five percent of the outstanding shares of Common Stock.
By virtue of the relationships described in Item 2 of this Statement and
this Item 5, each of the Reporting Persons (other than HCA) may be deemed to
share indirect beneficial ownership of all of the shares of Common Stock
directly beneficially owned by the Client Funds. HCA may be deemed to share
indirect beneficial ownership of the shares of Common Stock as expressly set
forth below. Specifically, as general partner, HCFM has indirect beneficial
ownership of (i) 180,389 shares (or 0.59% of outstanding shares) of Common Stock
held directly by Hayground Cove Institutional Partners LP, a Delaware limited
partnership, (ii) 220,539 shares (or 0.72% of outstanding shares) of Common
Stock held directly by Hayground Cove Turbo
Page 8 of 10
Fund LP, a Delaware limited partnership and (iii) 38,300 shares (or 0.13% of
outstanding shares) of Common Stock held by Hayground Cove Equity Market Neutral
Fund LP, a Delaware limited partnership. In addition, HCFM is general partner of
HCA, which in turn serves as investment manager pursuant to certain Investment
Management Agreements entered into between HCA and certain individual Client
Funds. In this capacity, HCA exercises the power to vote (or to direct the vote)
and to dispose (or to direct the disposition of) (i) 1,239,266 shares (or 4.07%
of outstanding shares) of Common Stock held directly by Hayground Cove Overseas
Partners Ltd., a Cayman Islands exempted limited company; (ii) 174,917 shares
(or 0.57% of outstanding shares) of Common Stock held directly by Hayground Cove
Turbo Fund Ltd., a Cayman Islands exempted limited company; (iii) 23,625 shares
(or 0.08% of outstanding shares) of Common Stock held by Hayground Cove Equity
Market Neutral Fund Ltd., a Cayman Islands exempted limited company; and (iv)
certain independent managed accounts, each of which directly owns 295,621 shares
(or 0.97% of outstanding shares) of Common Stock, 171,957 shares (or 0.56% of
outstanding shares) of Common Stock, 279,045 shares (or 0.92% of outstanding
shares) of Common Stock and 35,041 shares directly (or 0.11% of outstanding
shares) of Common Stock, respectively.
(b) Each of the Reporting Persons (other than HCA) has the power to vote
and to dispose of shares of Common Stock as follows:
(i) Sole power to vote or to direct the vote: -0-
(ii) Shared power to vote or to direct the vote: 2,658,700
(iii) Sole power to dispose or to direct the disposition of: -0-
(iv) Shared power to dispose or to direct the disposition
of: 2,658,700
HCA has the power to vote and to dispose of shares of Common Stock
as follows:
(i) Sole power to vote or to direct the vote: -0-
(ii) Shared power to vote or to direct the vote: 2,219,472
(iii) Sole power to dispose or to direct the disposition of: -0-
(iv) Shared power to dispose or to direct the disposition
of: 2,219,472
(c) The Reporting Persons have caused the purchase by the Client Funds of
217,125 shares of Common Stock within the last 60 days with a range of purchase
prices between $11.56 and $12.17. All such purchases were effected through
over-the-counter bulletin board transactions.
(d) Except as stated elsewhere in this Item 5, no other person has the
right to receive or the power to direct the receipt of dividends from, or the
proceeds from the sale of, the shares of Common Stock indirectly owned by the
Reporting Persons.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.
Other than as described in Items 2 and 5 of this Statement, there are no
contracts, arrangements, understandings or relationships (legal or otherwise)
among the Reporting Persons
Page 9 of 10 Pages
named in Item 2 and between such persons and any person with respect to any
securities of the Issuer, including but not limited to transfer or voting of any
of the securities, finder's fees, joint ventures, loan or option arrangements,
puts or calls, guarantees of profits, division of profits or loss, or the giving
or withholding of proxies.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
99.1 Joint Filing Agreement Among the Reporting Persons.
99.2 Letter dated August 14, 2006 from Jason Ader to the Issuer's board
of directors.
Page 10 of 10 Pages
SIGNATURE
After reasonable inquiry and to the best of the undersigned's knowledge
and belief, the undersigned certify that the information set forth in this
Statement is true, complete and correct.
Dated: August 14, 2006
By: /S/ JASON ADER
-----------------------------------------
Jason Ader
HAYGROUND COVE ASSET MANAGEMENT LLC
By: /S/ JASON ADER
-----------------------------------------
Jason Ader
Sole Member
HAYGROUND COVE FUND MANAGEMENT LLC
By: Hayground Cove Asset Management LLC,
its Managing Member
By: /S/ JASON ADER
-------------------------------------
Jason Ader
Sole Member
HAYGROUND COVE ASSOCIATES LP
By: Hayground Cove Fund Management LLC,
its General Partner
By: Hayground Cove Asset Management LLC,
its Managing Member
By:/S/ JASON ADER
---------------------------------
Jason Ader
Sole Member
EXHIBIT 99.1
FILING AGREEMENT
BETWEEN JASON ADER,
HAYGROUND COVE ASSET MANAGEMENT LLC,
HAYGROUND COVE FUND MANAGEMENT LLC
AND HAYGROUND COVE ASSOCIATES LP
The undersigned hereby agree that the Schedule 13D with respect to the
Common Stock, $0.01 par value, of Great Wolf Resorts, Inc. dated of even date
herewith is and shall be filed on behalf of each of us pursuant to and in
accordance with the provisions of Rule 13d-1(k)(1) under the Securities Exchange
Act of 1934, as amended.
Dated: August 14, 2006
By: /S/ JASON ADER
-----------------------------------------
Jason Ader
HAYGROUND COVE ASSET MANAGEMENT LLC
By: /S/ JASON ADER
-----------------------------------------
Jason Ader
Sole Member
HAYGROUND COVE FUND MANAGEMENT LLC
By: Hayground Cove Asset Management LLC,
its Managing Member
By: /S/ JASON ADER
-------------------------------------
Jason Ader
Sole Member
HAYGROUND COVE ASSOCIATES LP
By: Hayground Cove Fund Management LLC,
its General Partner
By: Hayground Cove Asset Management LLC,
its Managing Member
By:/S/ JASON ADER
---------------------------------
Jason Ader
Sole Member
EXHIBIT 99.2
[Hayground Cove Asset Management LLC Letterhead]
August 14, 2006
VIA FACSIMILE (608.661.4701) & OVERNIGHT COURIER
The Board of Directors
Great Wolf Resorts, Inc.
122 West Washington Avenue
Madison, WI 53703
Lady and Gentlemen:
Hayground Cove Asset Management LLC, as the investment advisor to Hayground Cove
Institutional Partners LP, Hayground Cove Overseas Partners Ltd., Hayground Cove
Turbo Fund LP, Hayground Cove Turbo Ltd., Hayground Cove Equity Market Neutral
Fund LP, Hayground Cove Equity Market Neutral Fund Ltd. and other accounts
managed by the investment advisor, is, according to public filings, the second
largest beneficial owner of the common stock of Great Wolf Resorts, Inc. ("GWR"
or the "Company"). We have been a long-term investor, and believe that the
market price of GWR shares fails to reflect the value embedded in its current
resort portfolio, the Great Wolf brand, the hotel management contracts, the
unused real estate surrounding your current hotel properties, the announced
project pipeline and the opportunity for other new developments and joint
ventures. We are writing this letter to encourage the Board to take immediate
steps to unlock long-term shareholder value by retaining an investment banking
firm to explore the sale of the Company.
The two significant earnings shortfalls in 2005 caused serious damage to
management's credibility and GWR's overall reputation with investors. As a
result of the lost investor confidence, the shares trade at a significant
discount to the underlying asset value. When Bruce Neviaser, Chairman of the
Board, called me on August 9th I was relieved to hear that Mr. Neviaser believes
GWR is worth at least $16 per share. I was also encouraged that he sought my
advice about which investment banking firm to contact and how best to go about
an organized sale of the company as a way to maximize the value for his shares
and that of all your public shareholders. As I told him, there are several
investment major investment banks, including Bear, Stearns & Co. and Deutsche
Bank, among others, that have great experience in this area and that could add
substantial value in conducting an organized sale process.
I am writing this letter so that the entire Board understands clearly the point
I made to Mr. Neviaser on our call. AT THIS TIME, WE BELIEVE SHAREHOLDER VALUE
WILL BE MAXIMIZED BY A SALE OF THE COMPANY.
Hayground Cove's investment professionals have substantial experience in
evaluating and investing in the hospitality industry. We continue to be
impressed by the current robust market
for mergers and acquisitions and the appetite of private equity firms. Just last
week, Intrawest agreed to be acquired by a private equity firm for $35/share.
In fact, in a report Deutsche Bank Securities put out last week reviewing the
acquisition of Intrawest by Fortress Investment Group, Deutsche Bank expressed
the view that "THE INTRAWEST DEAL REPRESENTS A 9.1X MULTIPLE ON FISCAL (JUNE)
2007 EV/EBITDA. IF WE ASSUME AN 8.0X MULTIPLE FOR IDRS RESORT & LEISURE TRAVEL
OPS, A 12.0X MULTIPLE OF ITS management FEE BUSINESS, AND A 7.0X MULTIPLE FOR
REAL ESTATE EBITDA, WE BELIEVE THE $35 OFFER ATTRIBUTES ROUGHLY $5-$6 IN VALUE
FOR IDR'S DEVELOPABLE LAND." Applying a similar analysis to Great Wolf's assets,
brand, real estate and management contracts would yield a WOLF stock price WELL
IN EXCESS OF $16 PER SHARE.
We support Mr. Neviaser's interest in a sale, and encourage the Board to take
immediate steps to engage an experienced investment banking firm for that
purpose. We believe the best way to maximize shareholder value at this time is
through the sale of the Company, and request a meeting with the Board to discuss
our views on valuation.
Sincerely,
/S/ JASON N. ADER
-----------------
Jason N. Ader