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The Interpreter

CEDAR FAIR TO BE SOLD?

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Lawsuits Filed Against Cedar Fair Sale:

 

New legal action could delay the sale of Cedar Fair to Apollo Global Management.

 

Four lawsuits filed in Erie County Common Pleas Court on behalf of five Cedar Fair unitholders claim the deal is unfair.

 

The civil suits represent Sandusky residents Mary Denslow and John R. Sprau, Indiana resident Todd Miller, Connecticut resident Kenneth Loiselle and Milford resident Joseph J. Braun....

 

The lawsuits seek to stop Cedar Fair from moving forward until legal issues are addressed.

 

To do that, a judge would have to determine if the unitholders have a solid case against Cedar Fair. The judge must also determine what's in the public's best interest and which action would cause the least harm....

Denslow and Sprau requested the cases be consolidated into a class action lawsuit that others may join.

 

http://www.sanduskyregister.com/articles/2...9e913687781.txt

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There's just one shopping day left until Christmas.

 

But if you want to buy an amusement park chain with 11 amusement parks and six water parks, there's still about 32 shopping days left.

 

Cedar Fair has 40 days from Dec. 16 -- the day it signed an agreement to be acquired by an affiliate of Apollo Global Management -- to consider other offers. That period runs through Jan. 25, said Stacy Frole, director of investor relations for Cedar Fair....

 

Assuming that a better offer doesn't come along, unitholders will be mailed proxy statements in February that include a ballot to vote on the Apollo deal, Frole said.

 

The unitholders may mail their ballots in, vote using the Internet or vote over the telephone, Frole said.

 

Each unit represents one vote, and the deal with Apollo must be approved by owners of two-thirds of the outstanding units....

 

http://www.sanduskyregister.com/articles/2...ont/1821265.txt

 

To the extent that Cedar Fair's board may have breached its fiduciary duties (and I am not saying it has), it could avoid this by finding and recommending a much higher offer for its units. How, I am not quite sure. The other side of this is that if this offer had not been recommended by the board, just how much longer could the company have continued to operate (or continue to operate) without breaching the covenants in its financing...and if it did breach them, could it successfully obtain refinancing?

 

Then again, even if a higher offer is obtained, some unitholders may attempt to continue lawsuits or start new ones. This one may take a while. Or not. It's just too early to tell, and not all facts needed to make a credible prediction on how long this will take or how it will end are known yet.

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This may be a little off the subject, but what got us into this mess is the worst depression since the Great Depression of the 1930's. The only thing keeping it from getting even worse than the Great Depression is the intervention of the U.S. Government.

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These lawsuits are to be expected and are nothing out of the ordinary when a company the size of Cedar Fair is sold. There may be something to them or there may not, only time will tell. The bigger issue in completing the sale at this time seems to be getting 2/3 of the shareholders to agree to the sale. Several stories have questioned whether or not that amount of support for the sale currently exists.

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Mr. Kinzel's Golden Parachute: TWENTY MILLION DOLLARS:

 

...Last year's proxy statement stated that if Cedar Fair CEO Dick Kinzel lost his job after Cedar Fair was taken over, he'd receive a $20 million golden parachute to cushion his fall from power. The new statement is expected to spell out details of his proposed contract extension under the new ownership....

 

There is MUCH in this article, which deserves to be read in full...including a timeline for the proposed sale (and the fact the SEC proxy statement is to be published Friday):

 

EDITED URL WORKS: http://preview.tinyurl.com/yccmydt

 

Also, in another article:

 

The proposed sale of Knott's Berry Farm parent Cedar Fair Entertainment could mean the Knott family's last shreds of involvement with the park could be severed.

 

The Knotts sold primary control of Knott's Berry Farm to Cedar Fair in 1997, but kept a portion of Cedar Fair stock. Darrel D. Anderson, a grandson of park founders Walter and Cordelia Knott, sits on the board of the Sandusky, Ohio-based Cedar Fair....

 

EDITED WORKING URL: http://preview.tinyurl.com/y8ge9ph

Edited by The Interpreter

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I say cut the cords that keep his parachute together and let him freefall like the rest of the stockholders and those they have laid off who will eventually come away with little to nothing for their shares.

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Cedar Fair's unit price rose in heavy trading Wednesday, prompting speculation that Apollo Global Management might be preparing a better offer or another suitor might be courting Cedar Fair.

 

Apollo has offered $11.50 per unit if unitholders will OK its offer to acquire Cedar Fair, a 28 percent premium over the price when officials agreed to the deal in December.

 

On Wednesday, Cedar Fair's unit price rose as high as $11.84 before closing at $11.63. Trading was heavy, with 1,361,327 units changing hands.

 

The numbers suggest investors believe Apollo might up the ante or someone else might come along, said Randy Hunt, branch manager and senior vice president with Stifel Nicolaus & Co. in Sandusky....

 

A portfolio manager at a firm that holds Cedar Fair stock said Wednesday he also noticed the trading activity.

 

He assumed it was based on speculation that other companies might be interested in acquiring Cedar Fair.

 

The name mentioned most often is the Blackstone Group, which, like Apollo, is a private equity company...

 

And then Stacy Frole, after saying she had no comment on the unit price, commented about the volume...

 

http://www.sanduskyregister.com/articles/2...ont/1846376.txt

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With FUN currently being at $11.98, it's 48¢ above Apollo's bid. Basically, if the stock holders were to vote now, they'd be foolish to agree to the deal, right? Or is there something I'm missing?

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The possibility that if no one else comes forward and offers more, the units could drop, even to zero? Including the possibility of bankruptcy? Just before this deal was announced, The Motley Fool had a column about Going Broke Candidates. Among the very first mentioned? Cedar Fair.

 

The proposed proxy states in great detail the difficulties the company faces, including probable breach of at least one of the financing covenants, higher financing costs in the future, a difficult operating environment and crushing debt load.

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Cedar Fair lawsuits consolidated

http://www.sanduskyregister.com/articles/2...ont/1877678.txt

 

Cedar Fair's largest shareholder says it will vote against the sale of the company

http://www.cleveland.com/business/index.ss...shareholde.html

 

Also: http://www.reuters.com/article/idUSN2213711420100122

 

Cedar Fair Press Release: http://www.cedarfair.com/ir/press_releases...mp;story_id=211

 

CEDAR FAIR COMMENTS ON MERGER TRANSACTION

SANDUSKY, Ohio, January 22, 2010 – Cedar Fair, L.P. (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today made the following statement in response to the announcement issued today by Q Funding III, L.P.:

 

The independent members of the Cedar Fair Board of Directors undertook a lengthy and thorough process to evaluate all options to address the Company’s capital structure and best serve the interests of our unitholders. After carefully weighing numerous alternatives and the outlook for the business, the Board determined, and continues to believe, that the proposed acquisition of Cedar Fair is the best option to maximize value for all unitholders. This transaction was thoroughly negotiated and includes protections for unitholders, including a go-shop process in which the Company has been actively soliciting alternative proposals. The offer price of $11.50 in cash per Cedar Fair limited partnership unit represents a 43% premium over Cedar Fair's volume weighted average closing unit price over the 30 days prior to the transaction announcement and a 28% premium over the closing unit price on December 15, 2009. This valuation also exceeds those of the recent comparable transactions in our industry.

 

We always welcome the views of our unitholders with the shared goal of enhancing value. Q Funding has not contacted us about the merger or the Company’s prospects.

 

We look forward to having the opportunity to speak with our unitholders regarding the merits of this transaction. We urge all unitholders to carefully review the Company’s definitive proxy materials when mailed before making a decision about how to vote.

 

About Cedar Fair

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Amusement parks in the Company's northern region include two in Ohio: Cedar Point, consistently voted "Best Amusement Park in the World" in Amusement Today polls and Kings Island; as well as Canada's Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan's Adventure, MI. In the southern region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott's Berry Farm; California's Great America; and Gilroy Gardens, which is managed under contract.

 

Forward-Looking Statements

Some of the statements contained in this news release (including information included or incorporated by reference herein) may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to the Company's expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond the Company's control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors could adversely affect the Company's future financial performance and cause actual results to differ materially from the Company's expectations, including uncertainties associated with the proposed sale of the Company to an affiliate of Apollo Global Management, the anticipated timing of filings and approvals relating to the transaction, the expected timing of completion of the transaction, the ability of third parties to fulfill their obligations relating to the proposed transaction, the ability of the parties to satisfy the conditions to closing of the merger agreement to complete the transaction and the risk factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the "SEC"). Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

 

Additional Information About This Transaction

This news release may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction, on January 8, 2010 the Company filed with the SEC a preliminary proxy statement on Schedule 14A. In addition, the Company will file with, or furnish, to the SEC all relevant materials, including a definitive proxy statement on Schedule 14A. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY'S PRELIMINARY PROXY STATEMENT AND, WHEN AVAILABLE, THE DEFINITIVE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The definitive proxy statement (when available) will be mailed to unitholders of the Company. Investors and security holders will be able to obtain a copy of the preliminary proxy statement, definitive proxy statement (when available) and other documents filed by the Company free of charge from the SEC's website, www.sec.gov. The Company's unitholders will also be able to obtain, without charge, a copy of the preliminary proxy statement, definitive proxy statement (when available) and other relevant documents by directing a request by mail or telephone to Investor Relations, Cedar Fair, L.P., One Cedar Point Dr., Sandusky, OH 44870, telephone: (419) 627-2233, or from the Company's website, www.cedarfair.com or by contacting MacKenzie Partners, Inc., by toll-free telephone at 800-322-2885 or by e-mail at proxy@mackenziepartners.com.

 

The Company and its directors and executive officers and certain other members of its management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed transaction. Additional information regarding the interests of such potential participants is included in the preliminary proxy statement and will be included in the definitive proxy statement when it becomes available.

This news release and prior news releases are available online at www.cedarfair.com.

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It is seeming less and less likely that this deal, as is, will be approved by 2/3 of the unitholders. I personally hope either Apollo ups their offer or a new offer from another company is announced tonight/tomorrow. Without a sale or merger avoiding bankruptcy looks to be VERY difficult.

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:sarmoti: COME ONNNNN BLACKSTONE! :sarmoti:

 

And not just Blackstone, here's to joining the Merlin family! Or... *The Heavens part and beams of light come crashing onto my willing face* :bow: Universal....... Sorry folks, I don't usually type this erratically. I just about pee my pants each time I think of Universal's Kings Island!

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