Friday, October 4, 2019 12:28 PM
U.S. amusement park operator Cedar Fair LP has rejected a $4 billion cash-and-stock offer from larger peer Six Flags Entertainment Corp as inadequate, people familiar with the matter said on Friday.
Saner heads prevailed. Thank you.
Or they’re just holding out for more money. Not sure this is over yet.
Or they know they're worth more than just a bunch of stock and a small cash component.
I would think Cedar Point alone would be almost worth what they offered including the park, hotels, beach, marina, sports centers, Castaway Bay, Sawmill Creek, etc.Last edited by Thabto, Saturday, October 5, 2019 10:11 AM
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If Six Flags bought the Company, Cedar Point would be closed for a short period of time.
Thabto, while that may or may not be true, SIX would also be assuming all the debt that financed those assets.
The analyst at Wells Fargo made it clear SIX was not really in a position for purchase FUN at this point in time. That may change in the future.
It will probably take more than a bunch of money to get Cedar Fair to sell.
Remember, ten years ago FUN's board of directors solicited a takeover bid from a private equity company, recommended it to unit holders, and got their asses handed to them in the subsequent vote. By comparison, this was an unsolicited bid that FUN's board rejected out of hand before the unit holders even had a chance to think about it.
Remember also that the ownership of FUN is different from the ownership of SIX. SIX is owned by money people. The owners of SIX are interested in getting returns on their investment and they don't care about anything else. That getting ROI requires competent park operations is important, but to most of them, SIX is just another company that they have interest in. By comparison, much of the ownership of FUN is 'park people'. Many of the units are held by people who are more interested in the long term viability of the parks and in the reputation of those parks than in the immediate returns on their investments. Not that ROI isn't important, but to them the parks are *also* of tremendous importance. Why? It goes back to the growth of FUN through the 1990's. Most of the firm's acquisitions were FUN buying an independent park (I know this applies to Worlds of Fun, Michigan's Adventure, and Knott's Berry Farm; I'm less certain about Dorney Park and Valleyfair!.) but not buying it outright with cash...instead, they traded partnership units in the combined company for ownership and control of the parks they purchased. This means that to this day, much of the ownership of FUN is held by the original owners of those purchased properties, people with names like Hunt, Jourden, and Knott. That last family in particular has a special interest in what happens to Cedar Fair even beyond their own paychecks, because their family name is literally on the line. This detail about FUN's ownership mix means that as a group, FUN ownership may be more conservative and more picky about potential buyout offers.
--Dave Althoff, Jr.
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