The bet that a higher offer would surface for water park recreation operator Great Wolf Resorts Inc. paid off Thursday, April 5, with KSL Capital Partners LLC topping the agreed-to $280 million buyout offer from Apollo Management LP.

Apollo entered a deal for the leisure business in early March at $5 per share. Great Wolf shares have since traded at a premium to the Apollo agreement even though Great Wolf conducted a fairly thorough auction.

Great Wolf contacted more than 40 parties during a nine-month process, and about 30 expressed interest. Of that number, 11 signed confidentiality agreements.

One party outbid Apollo at $5.05 per share at the tail end of the process, but that offer was not fully financed, and Great Wolf passed.

KSL, which offered $6.25 per share for Great Wolf, did not return calls. It was unclear whether the PE investor in leisure businesses was part of the initial auction, but it seems likely that it would have been at least aware of the sale process given its exposure to the industry.

Great Wolf said in a statement Thursday that it would consider the KSL proposal. Apollo declined to comment.

Great Wolf shares traded Thursday at $6.47; the premium to the new offer signals the expectation of a bidding war.

The Apollo deal included the assumption of $550 million in debt, including bonds that restrict the company from issuing dividends. That transaction did not immediately lead to the contemplation of the refinancing of that debt. The argument that the market was optimistic about the prospects for a better deal turned on the ability for Great Wolf to fund growth.

Great Wolf has traded over the Apollo deal, one arb said, because a bump to the payout for the equity on a relative basis to the company's debt is not considerable.

HG Vora Capital Management LLC filed a schedule 13D last month revealing a 12% stake in Great Wolf.

Apollo extended the tender offer for Great Wolf until April 20. The deal has a $5.3 million termination fee if Great Wolf accepts a superior proposal. That translates to about 9 cents per share, or 1.8%, of the equity value of the Apollo transaction.