bkroz Posted December 17, 2009 Share Posted December 17, 2009 I'd rather have the parks owned by a company that specializes in restructuring and has some experience in the entertainment industry than to continue to be owned by a declining and admittedly financially-failing company. Quote Link to comment Share on other sites More sharing options...
Bc9755 Posted December 17, 2009 Share Posted December 17, 2009 I don't think anyone's really panicking. The truth is, there's nothing but uncertainty in the future. Then again, that was the case even before this was announced. Absolutely. As was mentioned before in this thread, we were all aware of the huge debt Cedar Fair took upon themselves when they purchased the former Paramount parks. Yeah, those parks are money makers (mostly), but I don't think they're making enough to put a dent in that debt. Not right now. Cedar Fair could easily fall victim to what got Six Flags -- bankruptcy. They spent, spent, and spent a little bit more. Granted, Six Flags' financial policies (or lack thereof) can be debated forever, and they seemed to think that what they were doing would turn out okay, but it didn't. Cedar Fair seemed to be somewhat better with what they had, but at this point it doesn't seem as if they can dig their way out of this hole. If they're bought out by someone who is going to take on their debt and try to make it all work, fine. The alternative is much, much less appealing. With all that said, I like CF's Kings Island. No matter who's investing in or who owns the park, I wouldn't expect it to deteriorate at all. We've got nothing to worry about. Umm, I'm gonna need a ride on Diamondback now. Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted December 17, 2009 Share Posted December 17, 2009 Well, you`re going to have to wait until April for that ride on Diamondback. And to be fair, when Cedar Fair purchased Paramount Parks in 2006, I don`t think they or anyone else could have anticipated the recession that the country and the world slipped into. They took a risk when they bought Paramount Parks and needed near perfect conditions to pay off the debt that they incurred in buying the parks. Obviously, a recession isn`t a perfect condition to be in the business of running amusement parks, since discretionary spending is one of the first things people cut when times get tough. Not to mention many companies cut their corporate outings to amusement parks, both large and small. I know that Coney`s group sales were down this year compared to last year because of the economy. 1 Quote Link to comment Share on other sites More sharing options...
CoasterXtreme Posted December 17, 2009 Share Posted December 17, 2009 McDonalds at one point owned Donatos but the family still ran it! I assume something like this is going to happen... Dick is still going to be at the helm. Dick would never let go that easy of Cedar Fair, besides he has his reputation on this line! In Kinzel I Trust! Quote Link to comment Share on other sites More sharing options...
SOB_TOM Posted December 17, 2009 Share Posted December 17, 2009 Who knows how Apollo will make the management, but as long as the park look good, and the rides work, what do we have to complain about? Quote Link to comment Share on other sites More sharing options...
gigacoaster2k Posted December 17, 2009 Share Posted December 17, 2009 Can we change it to AKICentral.com now? Honestly, some of you guys need to chill the hell out! Have you ever been any of their companies? Why don't you take that a spin. I mean some of you are all taking this news like this is going to happen... Credit to Thrill Biscuit. I seem to remember the same kind of hate posts when Cedar Fair acquired the park. Since then most of us have taken back those posts. Gabriel, that right there is why I love you. I too was a bit shocked when I heard the news that CF had been sold, but I quickly got over it. I didn't expect a sale to come this soon. IMO, we need to have faith that these guys know what they are doing. CF is a very high profile and very large company. Apollo has to know what they are dealing with. At least CF is calling out for help with their debt any way they can, instead of continuing to dig themselves into a hole like Six Flags is. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted December 17, 2009 Share Posted December 17, 2009 ...At least CF is calling out for help with their debt any way they can, instead of continuing to dig themselves into a hole like Six Flags is. What? Both companies, if this goes through, will have restructured. Cedar Fair's books will continue to carry the company debt...as Apollo is assuming it and it is being refinanced. It is not going away. Six Flags will, arguably, IF the bankruptcy goes through, be in better financial shape, as most of its debt will have been discharged. And Apollo is not at all above letting its companies go into bankruptcy, if need be. See, for just one example, Linens N Things. Six Flags tried to do a very similar restructuring to this one. ONE of its bondholders, widely rumored to be Fidelity Investments, refused to consent, and the bankruptcy resulted. Apparently, that bondholder had insurance against losses which paid off only in the event of a bankruptcy. In Cedar Fair's case, it takes many, many approvals for this proposed restructuring to occur. Among those is consent of 2/3 of the units, which is likely to happen but may not. There are regulatory approvals galore. There is the chance the entire deal could fall through for other reasons. Interestingly, there is NO financial contingency. That means Apollo has rounded up the financing (it's in Cedar Fair's press release). Just shy of $2 billion in financing. About the same amount that Cedar Fair took on as its total debt when it bought Paramount Parks, and considerably more than it's current approximate debt of $1.6 billion. That alone shows how serious Apollo is about this transaction, but make no mistake about it. The private company that will own Cedar Fair if this happens will have this debt attributed to it and it will continue on Cedar Fair's books...an amount even higher than if the transaction had not occurred. ...The transaction is valued at approximately $2.4 billion, including the refinancing of the Company’s outstanding indebtedness. Affiliates of J.P. Morgan, B of A Merrill Lynch, Barclays Capital Inc., UBS Investment Bank and KeyBanc Capital Markets have provided an aggregate $1.95 billion financing commitment in support of the transaction.... http://www.cedarfair...ry&story_id=210 And it is very likely they have ideas how to cut costs, cut debt and improve value. Those ideas will doubtless be implemented if the transaction occurs. They could well include changing management. Or, they may not. For a little while, at least. Do not think that management and Cedar Fair will be allowed to skip obliviously free of debt in to a future of shiny, happy new rides, many more employees and higher salaries for all. That will not happen. 1 Quote Link to comment Share on other sites More sharing options...
CedarPointer Posted December 17, 2009 Share Posted December 17, 2009 I'm not too worried about the direction that the CF parks will head. I can't see them going downhill, and none of them are going to go anywhere (with the possible exception of CGA) anytime soon, even if they aren't owned by CF. Maybe the new owners will even add decent theming! Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted December 17, 2009 Share Posted December 17, 2009 ^^You said Cedar Fair's books will continue to carry the company debt? How? If Apollo is assuming all debt, wouldn't that mean CF won't have any debt? Also, the $700 milllion Apollo is also paying, is that how unit holders will be paid, and then other high-up people in the company will collect that money? Quote Link to comment Share on other sites More sharing options...
Avatar Posted December 17, 2009 Share Posted December 17, 2009 This is all so interesting and insights many pondering thoughts. At this time it's hard to predict anything but more of a wait and see situation. I was worried when Cedar Fair purchased Kings Island as I was worried they would move away from a theme park image and as it turned out I was right. But I was very glad to see them make many capital improvements, to resurrect the entertainment department and bring back a nostalgic feel to Kings Island. So over all from a guest point of view I feel Cedar Fair has been an improvement for Kings Island even though the number one issue for me is theme in a park, I often wonder what Cedar Fair would have done with Kings Island if they had the financial resources to follow through. At this point nobody on this board can say with certainty if this purchase is all good, bad or indifferent for Kings Island. So I hope that anyone who wishes to voice their optimism, skepticism or realistic views do so as this is a discussion forum and I often learn from others differing opinions because they bring up subjects that I may have not thought of. I can not think of any better time for this board KICentral to be so open to a discussion which encompasses everyone hopes, fears, concerns or relief of the unknown subject at hand. Quote Link to comment Share on other sites More sharing options...
jzarley Posted December 17, 2009 Share Posted December 17, 2009 Cedar Fair has a 40 day window to seek other opportunities, and can entertain unsolicited proposals even after that window up until closing. Yes, but considering the relatively low price that Blackstone paid for the BEC assets, in this market I wouldn't encourage anyone to hold their breath waiting for additional proposals. (3-5 years ago would have been a completely different story...) So, based on the cash purchase price of $700M that values the units at what? Somewhere in the $10-11 range? Not exactly a big premium on the current stock price... [EDIT: I just read one of the press releases that the per unit purchase price is actually $11.50...had just done the math in my head in the original post.] I'll also add (for anyone who seems concerned) that King's Island has changed owners something like five times in my lifetime (even more if you count all the reorgs that went on during the Paramount/Viacom/CBS years), and for all intent and purpose--it's still pretty much the same place I first visited in 1974 Quote Link to comment Share on other sites More sharing options...
IBEW_Sparky Posted December 17, 2009 Share Posted December 17, 2009 I am hoping for 5 things to come out of this... the company survives as a whole and Apollo continues to expand the properties when finances allow, fewer trim brakes, two pink slips, and a lakeside house for sale. All my personal opinions, and go right ahead and flame away if any feel the desire. 1 Quote Link to comment Share on other sites More sharing options...
IndyGuy4KI Posted December 17, 2009 Share Posted December 17, 2009 I am hoping for 5 things to come out of this... the company survives as a whole and Apollo continues to expand the properties when finances allow, fewer trim brakes, two pink slips, and a lakeside house for sale. All my personal opinions, and go right ahead and flame away if any feel the desire. Don't feel the desire, for I can't argue with most of them, but please don't hold your breath for any of these! A good question for Apollo, What is a trim brake? Quote Link to comment Share on other sites More sharing options...
LongLiveTheSmurfRide Posted December 17, 2009 Share Posted December 17, 2009 This is all because of the Mason tax proposal isn't it? One little tax hike and they sell the company! Obviously, I kid. Quote Link to comment Share on other sites More sharing options...
RollerNut Posted December 17, 2009 Share Posted December 17, 2009 ...At least CF is calling out for help with their debt any way they can, instead of continuing to dig themselves into a hole like Six Flags is. What? Both companies, if this goes through, will have restructured. Cedar Fair's books will continue to carry the company debt...as Apollo is assuming it and it is being refinanced. It is not going away. Six Flags will, arguably, IF the bankruptcy goes through, be in better financial shape, as most of its debt will have been discharged. And Apollo is not at all above letting its companies go into bankruptcy, if need be. See, for just one example, Linens N Things. Six Flags tried to do a very similar restructuring to this one. ONE of its bondholders, widely rumored to be Fidelity Investments, refused to consent, and the bankruptcy resulted. Apparently, that bondholder had insurance against losses which paid off only in the event of a bankruptcy. In Cedar Fair's case, it takes many, many approvals for this proposed restructuring to occur. Among those is consent of 2/3 of the units, which is likely to happen but may not. There are regulatory approvals galore. There is the chance the entire deal could fall through for other reasons. Interestingly, there is NO financial contingency. That means Apollo has rounded up the financing (it's in Cedar Fair's press release). Just shy of $2 billion in financing. About the same amount that Cedar Fair took on as its total debt when it bought Paramount Parks, and considerably more than it's current approximate debt of $1.6 billion. That alone shows how serious Apollo is about this transaction, but make no mistake about it. The private company that will own Cedar Fair if this happens will have this debt attributed to it and it will continue on Cedar Fair's books...an amount even higher than if the transaction had not occurred. ...The transaction is valued at approximately $2.4 billion, including the refinancing of the Company’s outstanding indebtedness. Affiliates of J.P. Morgan, B of A Merrill Lynch, Barclays Capital Inc., UBS Investment Bank and KeyBanc Capital Markets have provided an aggregate $1.95 billion financing commitment in support of the transaction.... http://www.cedarfair...ry&story_id=210 And it is very likely they have ideas how to cut costs, cut debt and improve value. Those ideas will doubtless be implemented if the transaction occurs. They could well include changing management. Or, they may not. For a little while, at least. Do not think that management and Cedar Fair will be allowed to skip obliviously free of debt in to a future of shiny, happy new rides, many more employees and higher salaries for all. That will not happen. Simply put, CFEC's accounting books won't be tossed out and new one started. The old ones will kept and used. The goal of Apollo will be to whip CFEC into shape by cutting expenses and raising profits, then once CFEC is of more value than what they paid for it, CFEC will once again be sold off. Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted December 17, 2009 Share Posted December 17, 2009 As the world turns, the plot thickens....! Levi & Korsinsky, LLP Investigates Possible Breach of Fiduciary Duty by the Board of Cedar Fair LP - FUN This is a very interesting article and raises some very serious questions. As I think Terpy will tell you, this WILL be a headache for Cedar Fair. If nothing else, you can be sure that this will raise others who agree that fiduciary duty was not met. Even if a legal battle does not ensue, I would imagine that this movement will gain some steam, and could push the acquisition price up to a marginally higher level. Once again I stress it could, not necessarily will. Disclaimer: I make no claims as to whether I agree or disagree with the article presented. I merely present this information to the KIC community for further knowledge. Quote Link to comment Share on other sites More sharing options...
jzarley Posted December 17, 2009 Share Posted December 17, 2009 ^ I think there's a very valid point here...whereas the $11.50/unit price represents a moderate premium on what the stock has been trading at lately, the fact is most CF unit holders did not buy in at these bargain basement prices. I'm guessing (and this is just "gut") that most CF unit holders came in at a price well north of $15--which means this buyout will result in a significant loss per unit for a good chunk of investors. Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted December 17, 2009 Share Posted December 17, 2009 ^ I think there's a very valid point here...whereas the $11.50/unit price represents a moderate premium on what the stock has been trading at lately, the fact is most CF unit holders did not buy in at these bargain basement prices. I'm guessing (and this is just "gut") that most CF unit holders came in at a price well north of $15--which means this buyout will result in a significant loss per unit for a good chunk of investors. True, but I think $11.50 is a pretty attractive price considering some of the alternatives. Quote Link to comment Share on other sites More sharing options...
jzarley Posted December 17, 2009 Share Posted December 17, 2009 ^ Oh, and I don't necessarily disagree with that point either. However, I've generally found that litigation-prone shareholders don't usually see things that way. Quote Link to comment Share on other sites More sharing options...
Reclaimer Posted December 17, 2009 Share Posted December 17, 2009 ^ I think there's a very valid point here...whereas the $11.50/unit price represents a moderate premium on what the stock has been trading at lately, the fact is most CF unit holders did not buy in at these bargain basement prices. I'm guessing (and this is just "gut") that most CF unit holders came in at a price well north of $15--which means this buyout will result in a significant loss per unit for a good chunk of investors. True, but I think $11.50 is a pretty attractive price considering some of the alternatives. Attractive? Hardly. I'm sorry but even just a few months ago FUN was trading upwards of $12. Yes, there are other (possibly worse) alternatives, but to call $11.50 attractive is laughable. 1 Quote Link to comment Share on other sites More sharing options...
goofywdw Posted December 17, 2009 Share Posted December 17, 2009 I just read something interesting on another forum. Someone said that they think the company might change their name to Cedar Fair? Same way Premier Parks renamed themselves Six Flags after buying the chain. Is that a possibility? Quote Link to comment Share on other sites More sharing options...
LongLiveTheSmurfRide Posted December 17, 2009 Share Posted December 17, 2009 Anything is a possibility, but I doubt it. They own a lot of chains and haven't taken on their names. This is just another one for them. Quote Link to comment Share on other sites More sharing options...
jzarley Posted December 17, 2009 Share Posted December 17, 2009 I just read something interesting on another forum. Someone said that they think the company might change their name to Cedar Fair? Same way Premier Parks renamed themselves Six Flags after buying the chain. Is that a possibility? Of course, the difference was Premier Parks was a theme park company that bought a more famous theme park company... In this case, Apollo has a much more diverse portfolio in a wide range of industries--from retail, to resorts, to real estate, to heavy industry. Yeah, CF is a major player in the theme park industry, but it's still pretty small potatoes when you start looking at it in terms of other industries... Quote Link to comment Share on other sites More sharing options...
BoddaH1994 Posted December 17, 2009 Share Posted December 17, 2009 ^ I think there's a very valid point here...whereas the $11.50/unit price represents a moderate premium on what the stock has been trading at lately, the fact is most CF unit holders did not buy in at these bargain basement prices. I'm guessing (and this is just "gut") that most CF unit holders came in at a price well north of $15--which means this buyout will result in a significant loss per unit for a good chunk of investors. True, but I think $11.50 is a pretty attractive price considering some of the alternatives. Attractive? Hardly. I'm sorry but even just a few months ago FUN was trading upwards of $12. Yes, there are other (possibly worse) alternatives, but to call $11.50 attractive is laughable. Why would it be laughable? If Cedar Fair went bankrupt the LP unit holders would get nothing. $11.50 sounds pretty attractive in comparison to that. In the News: Dayton Daily News - Kings Island owner says merger won't mean changes. Cincinnati.com - New Owner, Same Park Quote Link to comment Share on other sites More sharing options...
standbyme Posted December 17, 2009 Share Posted December 17, 2009 Dayton Daily News - Kings Island owner says merger won't mean changes. I guess it depends on how you feel about Cedar Fair whether you like this headline or not! Quote Link to comment Share on other sites More sharing options...
CedarPointer Posted December 17, 2009 Share Posted December 17, 2009 Remember, this is the same park that said that SoB was closed for mechanical reasons... Just keep that in mind. Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted December 17, 2009 Share Posted December 17, 2009 Remember, this is the same park that said that SoB was closed for mechanical reasons... Just keep that in mind. Any park chain in the world would in all probability use that same explanation. It is definitely not specific to Kings Island or Cedar Fair. As we now know, there was an ongoing investigation and "mechanical reasons" would represent a neutral term to explain the closure during an investigation to the public. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted December 17, 2009 Share Posted December 17, 2009 And/or there were other reasons the ride was/is closed... Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted December 17, 2009 Share Posted December 17, 2009 ...Attendance and revenues at many big parks have flattened out in recent years and it's no longer a guarantee that opening an expensive roller coaster at a major theme park will bring in waves of new customers.... "We never thought it was going to be as bad as it was," said Kinzel, who got his start supervising food stands in 1972 at the company's flagship park, Cedar Point in Sandusky, and became chief executive in 1986. He said there were no regrets over the acquisition of the Paramount Parks and that Cedar Fair would have been fine if it weren't for economic downturn that has cut into attendance and spending. "The last thing I wanted to do is give up control of the company," he said.... http://www.google.co...bshoKwD9CLB5I81 VERY interesting article.... Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted December 17, 2009 Share Posted December 17, 2009 As true as that is, there's quite a big difference between a closed ride and the future of the park ownership. I trust them on this one. Quote Link to comment Share on other sites More sharing options...
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