Jump to content
29yrswithaGApass

Cedar Fair spikes on report of Six Flags interest

Recommended Posts

Cedar Fair spikes on report of Six Flags interest

Oct. 2, 2019 12:04 PM ETCedar Fair, L.P. (FUN)By: Clark Schultz, SA News Editor
  • Shares of Cedar Fair (FUN +5.8%) have been halted after Reuters reports Six Flags Entertainment (SIX -0.3%) has a made a bid to acquire the theme park company.
  • Cedar Fair is reportedly considering the offer.
  • Nasdaq indicates the current trading halt is due to volatility.

Share this post


Link to post
Share on other sites

Cedar Fair-Six Flags merger report discounted

Oct. 2, 2019 12:40 PM ETCedar Fair, L.P. (FUN)By: Clark Schultz, SA News Editor3 Comments
  • Wells Fargo isn't sure that a combination of Cedar Fair (NYSE:FUN) and Six Flags Entertainment (NYSE:SIX) makes sense.
  • The firm calls the Reuters report a "stretch" because Six Flags doesn't have a CEO, the two theme park cultures are much different and a substantial premium would be required to acquire FUN to cover tax considerations for shareholders.
  • Cedar Fair is now only up 2.22% and Six Flags is down 1.20%.

Share this post


Link to post
Share on other sites

When H-Partners took control of Six Flags after the bankruptcy they had been in talks to merge the two companies. Rehan Jaffer showed me pictures of his meeting with Dick Kinzel out at Cedar Point back then. It's an interesting idea to merge the two, lots of cost savings could be found, I just wonder whose culture wins out?

 

Mergers are always tricky and don't always turn out in ways you expect. In my work life I've been through several mergers, and sometimes the company acquired ends up making big changes to the company that acquired it. 

 

If it does happen, it will be good for Six Flags passholders. 

Share this post


Link to post
Share on other sites

If I wasn't concerned about what might happen to Dorney (would Six Flags want 2 parks so close?) I would think overall it would be good. I like how Six Flags' parks are run much more than Cedar Fair.

 

Cheaper season passes, parks opening earlier in the season, Holiday in the Park has lots of coasters and rides open versus hardly any for Winterfest (Canada's Wonderland only has 5 non kiddie rides open!), better dining pass etc.

 

I can see why fans of Kings Island, Cedar Point and Carowinds would probably be upset. Cedar Fair seems to add major additions to those 3 parks and not much to the others compared to Six Flags that doesn't really add $20+ million coasters anymore and spreads out the additions to almost all parks every year.

Share this post


Link to post
Share on other sites

 

1 hour ago, Yoshi said:

If I wasn't concerned about what might happen to Dorney (would Six Flags want 2 parks so close?) I would think overall it would be good. I like how Six Flags' parks are run much more than Cedar Fair.

I would be more concerned about California's Great America than Dorney.  I think Dorney would fit right into the Six Flags strategy and wouldn't require heavy investment.  California's Great America is in a state of disrepair and will require a substantial investment over many years.  It is also much closer to Discovery Kingdom than Dorney is to Great Adventure.

 

If this deal went through, it might make sense to sell off some parks to pay down debt.  I could see Great Adventure being sold to SeaWorld, due to the amount of money it would bring in.

 

Something feels off about this rumor.  I wonder if Six Flags simply approached Cedar Fair to purchase some of their lower tier parks and it was misinterpreted as Six Flags making an offer for the whole company.

 

 

 

Share this post


Link to post
Share on other sites
2 hours ago, GAcoaster said:

When H-Partners took control of Six Flags after the bankruptcy they had been in talks to merge the two companies. Rehan Jaffer showed me pictures of his meeting with Dick Kinzel out at Cedar Point back then. It's an interesting idea to merge the two, lots of cost savings could be found, I just wonder whose culture wins out?

 

Mergers are always tricky and don't always turn out in ways you expect. In my work life I've been through several mergers, and sometimes the company acquired ends up making big changes to the company that acquired it. 

 

If it does happen, it will be good for Six Flags passholders. 

 

Six Flags and Cedar Fair are owned by the same company (like SeaWorld and Merlin)?

Share this post


Link to post
Share on other sites
18 minutes ago, Pineracer said:

 

Six Flags and Cedar Fair are owned by the same company (like SeaWorld and Merlin)?

No, but H Partners who were the majority owners of Six Flags up until just a year or two ago wanted to merge the two companies. They were in talks 10+ years ago. 

Share this post


Link to post
Share on other sites

I don't think this would be good at all. Cedar Fair and SF have different focuses (both good in their own ways), a merger would bring a lot into question. Also would be interesting to see how it would impact admission prices and benefits (adding 11 more parks that you can visit with a season pass would surely encourage them to increase the prices, no? especially when you would now have parks pretty close to each other like great adventure and dorney park, a season pass/membership would basically be 2 in 1 for many people).

 

I also reject the idea of letting Six Flags get closer to a monopoly of the amusement parks industry in the country. 

  • Like 1

Share this post


Link to post
Share on other sites

Six Flags had a conference at Kings Island recently.

9C727FC3-1F5A-4C63-9CC6-CF25127D30E2.jpe

Source: Winterfestguy on the kicentral.com forums.

https://kicentral.com/forums/index.php?/topic/35494-six-flags-entertainment-six-in-bid-to-acquire-cedar-fair-lp-fun-reuters/page/3/&tab=comments#comment-841892 

 

https://seekingalpha.com/news/3503501-stifel-sees-big-premium-cedar-fair

Quote

Stifel sees big premium for Cedar Fair

Oct. 2, 2019 2:58 PM ET|About: Cedar Fair, L.P. (FUN)|By: Clark Schultz, SA News Editor 
 
  • Cedar Fair (FUN +4.7%) perks up again in afternoon trading after Stifel says the theme park stock could be worth as $90 in a takeover scenario.
  • Shares of FUN are back over $60 after swinging up and down during the session.
  • Volume on Cedar Fair is over 5X normal activity.

 

Share this post


Link to post
Share on other sites

Six Flags really sees the membership program as a huge win, and adding more parks would simply increase that. When they were in talks to try and purchase SeaWorld Parks & Entertainment a few years ago one of the big things mentioned was that having more properties would simply increase their membership sales. Memberships are a predictable and steady year round income for the company, and that's what they're really working for, evening out the revenue across the whole year. More parks, even in close proximity like Dorney and GA would probably do more to boost both parks with pass sales. When you have several parks like this (SFA/KD, Great America/SFDK, Knott's/Magic Mountain, etc) this just gets more profitable. 

Share this post


Link to post
Share on other sites

^SFGAm/Cedar Point would be another one.  Cedar Point does a lot of radio and television marketing in the Chicago/Northern Illinois area and it has been increasing over the last few years.

 

Share this post


Link to post
Share on other sites

A merger seems farfetched to me-but then again I've seen stranger things(ex: coasters with 7 or more loops; coasters going over 200 and then 300 feet....).

The only good thing that comes to mind for me is that I would be able to spend more time at KD(SFA being my home park).

Share this post


Link to post
Share on other sites

And we have some smoke,  Cedar Fair backed out of the investor conference that was supposed to start 14 minutes ago.  I guess they don't want to answer any questions about this.  I woke up early to listen to the webcast and all links to the conference were deleted from Cedar Fair's investor page this morning.

 

https://seekingalpha.com/news/3503666-cedar-fair-said-skipping-conference-today

Quote

Cedar Fair said to be skipping conference today

Oct. 3, 2019 7:16 AM ET|About: Cedar Fair, L.P. (FUN)|By: Clark Schultz, SA News Editor 

Cedar Fair (NYSE:FUN) has canceled an appearance from the B. Riley FBR Annual Consumer & Media Conference, according to Bloomberg.

Conference cancellations are sometimes seen as an indication that a company is in the M&A mix.

The theme park stock rose 2.61% yesterday on volume of over 2.3M shares after a Reuters report indicated that Six Flags Entertainment (NYSE:SIX) made an acquisition offer.

FUN +0.05% premarket to $59.75.

 

https://www.businesswire.com/news/home/20190927005044/en/Cedar-Fair-Executives-Participate-B.-Riley-FBR

Quote

SANDUSKY, Ohio--(BUSINESS WIRE)--Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, announced today it will participate in the B. Riley FBR 5th Annual Consumer & Media Conference on Thursday, October 3, 2019, in New York City. The presentation will begin at 8 a.m. EDT.

 

Richard Zimmerman, Cedar Fair’s president and CEO, and Brian Witherow, executive vice president and CFO, will participate in a B. Riley FBR analyst-led “fireside chat.” The discussion is accessible live via audio webcast on Cedar Fair’s Investors website at https://ir.cedarfair.com, under the “Investor Information” and “Events & Presentations” tabs. A replay of the presentation will be available on the website shortly after the fireside chat discussion concludes.

 

Share this post


Link to post
Share on other sites

https://uk.reuters.com/article/us-cedar-fair-m-a-six-flags-entmt-exclus/exclusive-cedar-fair-rebuffs-4-billion-offer-from-six-flags-sources-idUKKBN1WJ1Z3

Quote

Exclusive: Cedar Fair rebuffs $4 billion offer from Six Flags - sources

 

OCTOBER 4, 2019 / 11:22 AM

 

(Reuters) - U.S. amusement park operator Cedar Fair LP (FUN.N) has rejected a $4 billion cash-and-stock offer from larger peer Six Flags Entertainment Corp (SIX.N) as inadequate, people familiar with the matter said on Friday. 
 

Cedar Fair’s decision is a blow to Six Flags, which is already the world’s largest regional theme park operator and has been looking to expand its footprint so it can increase its ticketing pricing power. 

 

Six Flags had offered to acquire Cedar Fair for around $70 per share, to be paid for the most part by using Six Flags shares as currency, but also funded with a small cash component, the sources said. Cedar Fair shares were trading at around $58 right before Reuters broke news of Six Flags’ bid on Wednesday.
 

Cedar Fair responded that Six Flags’ bid was too low, not least because it did not compensate Cedar Fair shareholders for giving up on the company’s tax-advantageous publicly traded partnership. This allows the company to pay out the majority of its earnings to shareholders without first paying U.S. federal or state income taxes. 

 

Six Flags Chief Executive James Reid-Anderson is preparing to retire by the end of February, and the company had offered Cedar Fair executives roles in the management of the combined company, though this was not enough to persuade them, the sources added. 

 

Reactions from stock market investors, as well as amusement park fans concerned about the impact of the potential deal on how Cedar Fair parks will be run, have been negative, and there is no indication that Six Flags will counter with a new offer, the sources said. 

 

The sources asked not to be identified because the matter is confidential. Cedar Fair and Six Flags did not immediately respond to requests for comment.

 

Share this post


Link to post
Share on other sites

No offense but I am incredibly relieved that this did not happen (and hope it does not hapen in the future. )

 

Nothing personal, its just that Cedar Fair has done wonders for Kings Island since they took over. I would hate for that to be potentially compromised.

 

SIX sorts of "spreads the wealth" moreso than FUN when it comes to investments. Thats great if you're a small park and will at least get something new every year. But when my home park is in one of the company's top tiers (KI), I'm perfectly fine with "the rich getting richer" under Cedar Fair's model thanks :P

Edited by Llama Drama

Share this post


Link to post
Share on other sites

If Kings Island was my home park, I would feel the same way. Just like when Great Adventure was getting a new coaster almost every other year (and sometimes consecutive years like Kingda Ka and El Toro) for a long time and the smaller Six Flags parks were not getting much.

 

 

  • Like 1

Share this post


Link to post
Share on other sites

CEO search must not be going too well I guess. 

 

Combining the two companies may not happen, but I can see Six Flags making offers on individual parks if they don't come up with a counter offer. I'm sure CF would unload at least 1 or 2 of its parks.

Share this post


Link to post
Share on other sites

On the last earnings call, Six Flags said there is a lot of interest in the CEO position and they were in the process of interviewing people. 

 

In 2009, the two parks Cedar Fair wanted to sell were Valleyfair and Worlds of Fun.  Considering the current state of Kings Dominion and the buildup of Busch Gardens Williamsburg, I wouldn't be surprised if Cedar Fair was willing to part with Kings Dominion.

https://www.mprnews.org/story/2009/03/09/valleyfair_sale

Quote

(AP) - The owner of the Valleyfair amusement park in Shakopee, Minn., says it's considering selling that park and another one it owns in Missouri to pay down its debt. 

Cedar Fair Entertainment Co. is based in Ohio. The other park mentioned for possible sale is Worlds of Fun in Kansas City, Mo.

 

Share this post


Link to post
Share on other sites
1 hour ago, Medusa42 said:

On the last earnings call, Six Flags said there is a lot of interest in the CEO position and they were in the process of interviewing people. 

 

 

Lots of interest doesn't always translate into good candidates. If they were offering the Cedar Fair team executive roles within the merged company, it leads me to believe that they aren't too thrilled with their current options.

  • Like 1

Share this post


Link to post
Share on other sites

I was thinking about Six Flags buying Cedar Fair when I was walking around Dorney on Saturday. On other amusement park sites one main complaint I saw mentioned often was how bad operations are at Six Flags parks and that Cedar Fair's operations are better. Maybe it varies a lot from each park but I thought Cedar Fair's operations don't seem so great on a busy Saturday during Haunt where Thunderhawk is running 1 train with a long line (and no one at the Fast Lane merge point). Also at Wild Mouse with 1 person checking restraints and advancing the cars in the station while hearing people say they waited an hour for the coaster with the line not even to the entrance with no switchbacks in use. When I was at Kings Dominion in June, it was taking over 4 minutes to dispatch each Twisted Timbers train. Great Adventure often runs all trains on the coasters even with little to no lines.

 

Another complaint I saw on other sites was Six Flags doesn't care about park history like Cedar Fair does. Cedar Fair tore down the over 100 year old Mansion House Hotel & Restaurant for a Subway and removed many of the rare and classic flats and dark rides from Dorney right after they took over the park.

  • Like 1

Share this post


Link to post
Share on other sites

Considering our location, I wouldn't doubt it Harry!

 

I honestly think they're better off making a bid for the Seaworld parks. Six Flags already has a wealth of experience handling animals and it would give them a strong foothold in Florida (especially in the very competitive Orlando area.)

 

 

 

Share this post


Link to post
Share on other sites

I think GA has some of the best operations in the chain, so it's hard for us to compare. It is a GA-level policy to start the day with all available trains, whereas I know several parks don't. However, several CF parks don't do that either. Honestly, most of the things that people fault Six Flags for, you can fault Cedar Fair for as well, in some form or another. People always seem to use Cedar Point to compare to the average and below average SF parks, which obviously isn't an equal comparison.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

×
×
  • Create New...