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Cedar Fair: Sale? Re-Finance? What Next?


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Great. We're facked.

Even small wooden coasters have been successfully relocated, including the Starliner from Miracle Strip in Florida which went to Cypress Gardens and now the one from Kiddieland in Chicago is headed to

I would not say that. I would say this is a time of great uncertainty, and that no one, from Mr. Dick Kinzel to Mr. Geoffrey Raynor to Mr. Mark Shapiro really knows what will happen next. Somewhat iro

VERY interesting article....

Thanks for posting the link...and yes, I did read the whole article. ;)

Cedar Fair, based in Sandusky, already had made a number of moves in the past year to shore up its bottom line. It sold a large chunk of land next to Canada's Wonderland, its park outside Toronto, and the company cut cash distributions to unit holders.

I would have liked to have seen them add "And they gave long-time company employee Scooby Doo the pink slip". (Yes...i'm STILL bitter! :lol: )

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I'd stress a different part of that article. A quote from one Dick Kinzel:

..."The last thing I wanted to do is give up control of the company," he said....

For those who think Mr. Kinzel will still be controlling Cedar Fair's destiny, read that quote again. And again. Freud would tell us that Mr. Kinzel just indicated he will not be controlling the future at Cedar Fair. IF this happens. In relatively unguarded moments, or the right context, true feelings leak out.

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I'd stress a different part of that article. A quote from one Dick Kinzel:

..."The last thing I wanted to do is give up control of the company," he said....

For those who think Mr. Kinzel will still be controlling Cedar Fair's destiny, read that quote again. And again. Freud would tell us that Mr. Kinzel just indicated he will not be controlling the future at Cedar Fair. IF this happens. In relatively unguarded moments, or the right context, true feelings leak out.

Just in case some people didn't notice.
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^ 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.

Oh, no I get that, and completely understand That's why I said that I agree there are other (possibly worse) alternatives. To call an $11.50/unit ROE on something you almost certainly purchased at a much higher price, all while this price is being called a 'premium' is what is laughable. I'll agree anything is better than nothing.

(Also, I would really love to go through and clean up all of those quotes in this post...but I'm not. Call me lazy. :P )

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..."The last thing I wanted to do is give up control of the company," he said....

For those who think Mr. Kinzel will still be controlling Cedar Fair's destiny, read that quote again. And again.

You would know better than I...believe me, I KNOW that...but couldn't he just mean that now he has someone to answer to?

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..."The last thing I wanted to do is give up control of the company," he said....

For those who think Mr. Kinzel will still be controlling Cedar Fair's destiny, read that quote again. And again.

You would know better than I...believe me, I KNOW that...but couldn't he just mean that now he has someone to answer to?

Well, he was supposed to be answering to the Board before...unless of course that board was breaching its fiduciary obligations...about which allegations Mr. Butcher posted an item earlier today...

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And now another law firm is investigating in preparation for a possible lawsuit against this proposed deal...

5:19pm EST

The Law Offices of Brian M. Felgoise, P.C. announces an investigation into possible breaches of fiduciary duty and violations of state law, among other things, in connection with an attempt by Cedar Fair LP to sell the Company to Apollo Management, a private equity firm. The investigation is focused on whether the proposed deal provides adequate value to The Company`s shareholders.

http://www.reuters.c...=20091217221900

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Well, he was supposed to be answering to the Board before...

I know that. :) I meant it more like he wouldn't be "God" and do whatever he felt like...he would now have to get approval from HIS superiors!

On a side-note...whenever I punch on one of your links it opens it up in the same forum window...on the "old" forum, didn't they always automatically open in a seperate window so that you could just X them out and still be in the same spot on the forum?

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And more and more law offices seeking clients, in effect:

Brodsky & Smith, LLC (a Pennsylvania law firm):

http://www.tradingma...20News/2733640/

Robbins Umeda LLP (a California law firm):

http://www.tradingma...20News/2733629/

I assume there will be many more of these and will not be posting any more of them.

Yes, Cedar Fair and Apollo will have their hands full with litigation over this proposed 'merger.'

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I don't think it will do much to Kings Island and other parks.......you never know, it may be better. This has probably be asked, but will their stock trades still be the same? Will it still be 'FUN'?

There will be no stock publicly offered if this happens. The company will be private. FUN will be no more.

What are these law firms investigating? Breaches of fiduciary duty? What is that and what does it mean if CF is found...'guilty' or whatever it would be called?

Yes, breaches of fiduciary duty. Investigating? More like fishing for clients. Or plaintiffs for one or more class action lawsuits. Or legal fees. And if Cedar Fair's board were found to have breached their fiduciary duty, they could have to pay for it...quite literally. One would assume the board has insurance to cover just such a possibility. Breach of fiduciary duty basically would mean, perhaps, the board acted in its own self interest and/or that of management, instead of in the unitholders'...

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Well, there are many other ways this could fall through, too. From regulatory approvals to Apollo backing out to other unforeseen problems.

I meant besides any of that. The unitholders must agree to it, so if they do, they can't say anything.

But what about the people who don't agree?

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That thing called Cedar Fair, or its successor, will be owned by Apollo, should this happen. Remember, Cedar Fair is calling this a 'merger.' FUN will be no more. Cedar Fair, or whatever it is called, would be a business unit of Apollo, but with its own books, etc., the easier to sell off when the time comes...or for Apollo to avoid debt, should the company once known as Cedar Fair have to go bankrupt at some point.

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I really don't see much coming of these lawsuits at this time. It appears to me to just be people fishing for something they think could be there. I would be suprised if the sale is not approved and if we see any significant visable differences in park operations this year. I think the news that CF headquarters and (at least for now) management will stay the same means that Apollo is happy with the business model they see. The parks make money. Even in this economic climate CF was able to do that this year, they are simply saddled with far too much debt and this seems to be a good move (in my opinion) for everyone involved.

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Here's something I don't get:

1. I have never heard of Cedar Fair having any troubles with money (well, I mean big enough troubles to be sold)

2. Six Flags looked like they were in deep trouble, but they recovered much faster than Cedar Fair.

I just never knew Cedar Fair was in trouble. That's what I'm getting at. Are they, or is somebody just buying them because they want to? Haha, I know, I don't know anything about economics........

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Here's something I don't get:

1. I have never heard of Cedar Fair having any troubles with money (well, I mean big enough troubles to be sold)

2. Six Flags looked like they were in deep trouble, but they recovered much faster than Cedar Fair.

I just never knew Cedar Fair was in trouble. That's what I'm getting at. Are they, or is somebody just buying them because they want to? Haha, I know, I don't know anything about economics........

Hmm, where to start?

1.) Cedar Fair's "troubles with money" stem solely from their very large debt-laden acquisition of the former Paramount parks. The chain is 1.6? Billion dollars in debt. That money will be coming due in greater increments shortly. Keep in mind that for three quarters, attendance was down across the chains by 1.4 million visitors (the last number I have seen cited). It is hard to pay down BILLIONS in debt with declining attendance, revenues, and per caps. The current economic climate just makes it difficult to repay the debt, thus Cedar Fair has found a partner who can assist in refinancing and helping pay off that debt if times get more difficult.

2.)Six Flags has not recovered faster than Cedar Fair. I do not know what you are quoting with this statement. Six Flags is in Bankruptcy and has been since June I believe. They couldn't pay off their debt when it was due and had to rely on wiping out their debt to creditors via the legal system. Cedar Fair is avoiding this in the short term by merging with Apollo.

Does that help?

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Cedar Fair is not really in trouble... they just have so much debt. Debt is a very serious thing... and oftentimes, it is very hard to get rid of, especially in these hard economic times.

I'm guessing Apollo Management has enough money that they can pay off quite a bit of the debt (Maybe 10%- 20%?).

Apollo Management will increase the value of Cedar Fair by decreasing the debt, so after some of the debt is payed off, Apollo Management will likely sell Cedar Fair for much more than they bought it, maybe even to another Amusement Park Operator. (Six Flags, anyone?)

This is all under the assumption that the deal will not fall through...

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While anything can change, right now, Kinzel is saying that neither employees nor guests will notice any changes:

"For our employees and our customers, nothing is going to change," Kinzel said.

The company's headquarters will stay in Sandusky, staffing levels will stay the same, and Kinzel and his management team will remain at the helm, he said.

http://www.cleveland.com/business/index.ssf/2009/12/cedar_fair.html

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