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SeaWorld makes $3.4 billion takeover bid for Cedar Fair?


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https://www.bloomberg.com/news/articles/2022-02-01/seaworld-said-to-make-3-4-billion-takeover-bid-for-cedar-fair

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SeaWorld made a bid of about $60 per unit in cash for Sandusky, Ohio-based Cedar Fair, according to the people, who asked not to be identified because the information is private. The companies are working with advisers on the proposal, the people said. 

Deliberations are ongoing, and it’s unclear whether the approach will lead to a transaction, the people said. 

 

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https://www.bloomberg.com/news/articles/2022-02-01/seaworld-said-to-make-3-4-billion-takeover-bid-for-cedar-fair
 

According to Bloomberg SEAS has made a $3.4 billion dollar all cash offer to purchase Cedar Fair which works out to $60 a share which closed at $49.63 yesterday and was up sharply this morning.


Outside of Kings Dominion and Busch Gardens Williamsburg there is really no competition between the two, and it feels like the chains should be pretty compatible.  Really makes a combined chain wide annual pass even more valuable.  Wonder if we would see a Sesame Street area at Kings Island, and would they expand Snoopy to other parks?  This kind of change could see the return of Intamin to Cedar Fair parks as well.

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$60 a share isn`t much of a premium over where Cedar Fair has been trading.  Geographically it makes sense.  But everything I have seen, SEAS has had a revolving door of leadership driven by a particular board member.

I think it will end up being like the reported deal with Six Flags from a few years ago.

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Thread title should be changed to SEAS makes offer to buy Cedar Fair.

There is nothing out there to suggest this is a done deal.  It's sort of like me telling my neighbor: "Hey, I like your truck!  I'll give you 20k for it!"  Unless he agrees to sell it to me, it ain't sold.

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What makes you so confident that its not going to happen? I would think it would take more than $60 per share, but I have no clue at what point the major holders of CF stock would accept such a deal.  Lets say it were to happen, would it be a good thing for KI, or a bad thing; perhaps even negligible?  If you have an opinion either way, why do you feel that way?  Would love to hear people's thought on a potential Sea World takeover and how it would affect KI and other CF parks.  Seems like a potentially death blow to King's dominion, I don't think there are any other parks in direct competition.

 

TIA

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Gutted for Kings Dominion if this happens. What a beautiful park, it would almost certainly be doomed. Awful. And their premium passes are ugly compared to the CF Platinum. Twice the price or more and not even parking included, except at the home park of purchase. 

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52 minutes ago, medford said:

What makes you so confident that its not going to happen? I would think it would take more than $60 per share, but I have no clue at what point the major holders of CF stock would accept such a deal.  Lets say it were to happen, would it be a good thing for KI, or a bad thing; perhaps even negligible?  If you have an opinion either way, why do you feel that way?  Would love to hear people's thought on a potential Sea World takeover and how it would affect KI and other CF parks.  Seems like a potentially death blow to King's dominion, I don't think there are any other parks in direct competition.

 

TIA

http://www.blackseagrain.net/2022/01/27/amusement-and-theme-parks-market-emerging-trends-statistics-business-review-opportunities-future-development-regional-outlook-2028/

Up to 30.9% upside. Make the premium per appear unit unsatisfactory.

 

**This is not investment advice. 

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  • IndyGuy4KI changed the title to SEAS To Make Bid to Purchase Cedar Fair
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One comment I found interesting in this, if it were to happen,

Quote

Kings Island would no longer be chained/restricted by Cedar Point

There would certainly be less corporate bias towards Cedar Point across the entire CF chain of parks if this takeover happened, but I'm on the fence because of how SEAS handles its day-to-day operations; season passes, customer service, etc. Not heard good things about those. 

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3 minutes ago, Coasterteam said:

One comment I found interesting in this, if it were to happen,

There would certainly be less corporate bias towards Cedar Point across the entire CF chain of parks if this takeover happened, but I'm on the fence because of how SEAS handles its day-to-day operations; season passes, customer service, etc. Not heard good things about those. 

SEAS would sell off most of the parks. They’d keep CP, KI, Knotts, Canada, and maybe Carowinds. You have to realize that if KI is Cedar Fair’s second city, they’ll be sitting in fourth or so compared to the other SEAS parks. Does this matter? Hard to say. If you subscribe to that hierarchy theory then it’s not a good thing. 

Also, you are probably seeing articles saying that FUN is investigating the offer. Do not read too far into this. Under SEC regulations they have a fiduciary duty to the shareholders. They can’t just say no. 

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3 minutes ago, BoddaH1994 said:

SEAS would sell off most of the parks. They’d keep CP, KI, Knotts, Canada, and maybe Carowinds. You have to realize that if KI is Cedar Fair’s second city, they’ll be sitting in fourth or so compared to the other SEAS parks. Does this matter? Hard to say. If you subscribe to that hierarchy theory then it’s not a good thing. 

Also, you are probably seeing articles saying that FUN is investigating the offer. Do not read too far into this. Under SEC regulations they have a fiduciary duty to the shareholders. They can’t just say no. 

Of course, as a professional corporation I wouldn't expect them to immediately respond with a decision. I personally believe they would likely decline the offer, but that's just my prediction. Curious to see where it goes of course, it may be a benefit in the long-run, it may not. 

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To me, it depends on the extent of the offer. I would be okay if it were a merger where both companies combine since likely the CF executives would probably be apart of it. Now, if it is a straight up buyout where we become straight SeaWorld and CF executives aren't involved, then that's a no from me. It'll be interesting to see where this goes. 

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12 hours ago, Snowball said:

I do not like this at all. I’ve really been liking the direction KI is headed and I feel this takeover would stop everything dead in its tracks.

I agree, KI has been heading in a very good direction, especially with the park trying to honor the parks own history. 

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IF it were to happen, as @BoddaH1994 said, parks would be sold.  I can see Dorney and KD going.  MA  and  VF would be a good candidate to become a Sesame Place.  No reason to sell the  Schitterbahns, CGA, WOF unless they wanted to raise capitol.  I can't see them selling off any of the SEAS parks and they are mostly in southern markets.

And it could end up being a good thing for both companies.  The aquirer sometimes maintains the best of the acquired--when Kroger bought Fred Meyer, much of the FM culture came to KR.  And the Kroger Marketplace stores are a direct result of what FM did.  Same with Trugreen buying Chemlawn.  

What if they sold off WOF/KD/VF/CGA/San Antonio and San Diego to a group of seasoned management who called themselves CECo?  

It will be interesting to see what happens.  Things will be either be shaken, or the two companies will continue independently--one in a predictable manner and the other in a haphazard manner.  

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This would be a DISASTER for any of us that has enjoyed Cedar Fair ownership of these parks.

From attending Busch Gardens over the last 10 years, i can attest the quality of experience has went in the gutter there.  The SEAS parks are run by penny pinching.    They are constantly cutting hours, entertainment,  food service, theming etc.   Christmas Town this year looked HORRIBLE because they cut the lights so much.

Here is a great example of the low-quality experience that BG has become.  They advertise a 10 am opening, but open the park in phases and normally do not have the full park operational until an hour or hour and a half after opening.     

Another example is Pantheon has $0 theming.  Its station is a box with 6 posts.    Compare that to the quality renovations of Area 72, Blue Ridge Junction, and Jungle XPedition under Cedar Fair.

Remember SEAS has little cash. They had liens filed on them in 2020 because they could not pay vendors.    They would be SOOO leveraged to buy CF that their cash flow would be going to pay interest, and park improvements will be less and less and less and cuts would be more and more and more.

 

And then theirs the possibility of beautiful Kings Dominion getting the Geauga Lake treatment.   That would be a sad day as that park has so much potential.

 

And for those that like their season dining passes, day goodbye.  SEAS doesn't offer that. SEAS pricing is much higher than CF  ($190 for a one park pass).  While CF is underpriced, SEAS is overpriced for what they offer.

 

I would much rather be paying separate admissions to both chains than see this fiasco happen.

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It's nearly impossible to describe how awful it was at BGW last season. The park's operation was a catastrophe. I was completely shocked by how poor the experience was. Made CP 2020 during the Access Pass season look like a VIP experience. Very concerned. 

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I agree about not wanting to see. I feel like Cedar Fair is finally going in a good route for the parks and doing some great job with theming. Carowinds county fair and blue river junction areas look great. For Kings Island Area 72 is a great addition with lots of potential for expansion and Mystic Timbers has fantastic theming for a regional park like ours. SEAS has some nice theming at their parks but a lot of it was done in the past. Their recent additions have been pretty sparse theming wise as mentioned with Pantheon. They aren't completely devoid of any but it is minimal compared to what it was, and looking at Journey to Atlantis they have been gutting some theming currently there. A lot of the big thematic parts on newer installations like Cobra's Curse and Iron Gwazi's stations are remnants of prior attractions that are just being reused and not newly built. With this in mind though I don't think a merger would be horrible but buying it out completely and replacing CF I don't like the idea of. when they seem to be struggling a bit financially already, I can't imagine how they would be starting out with spending tons on these new parks and then trying to manage them all with new capital.

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1 hour ago, Coasterteam said:

Of course, as a professional corporation I wouldn't expect them to immediately respond with a decision. I personally believe they would likely decline the offer, but that's just my prediction. Curious to see where it goes of course, it may be a benefit in the long-run, it may not. 

The second part wasn’t a response to the quote. I was just sure that if it wasn’t addressed up front that we’d have people posting, “OMG THEY ARE CONSIDERING IT!!!” :D

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I've had nothing but really great experiences at Seaworld Orlando, and Busch Gardens Williamsburg over the past year, personally, I think this change is a huge positive for Kings Island in particular, and I think there would be a very good chance of Kings Island going pretty close to year round, and operating like Busch Gardens Williamsburg, I can also see Carowinds doing something very similar with special events year round, but not necessarily every attraction open.   

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6 hours ago, JimParker85 said:

Gutted for Kings Dominion if this happens. What a beautiful park, it would almost certainly be doomed. Awful. And their premium passes are ugly compared to the CF Platinum. Twice the price or more and not even parking included, except at the home park of purchase. 

Not true, their top tier pass is good to all parks and preferred parking included.

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I may be in the minority here, but I actually wouldn't mind CF and SW combining. As pointed out before, SW management has been kind of rocky lately going through so many CEOs. Also, I don't think SW has been in that great of finanical shape as there was some difficulty paying off Iron Gwazi. So can they really afford this? That would be the main concern. But, what if this were to open to door for CF to make a counter-offer? Maybe that's what they are hoping for. Going that route may make more sense. BGT and SWO are my home parks and I enjoy them. If that were to happen, I would just hope they keep their staff that is experienced with caring for the animals. But I don't think CF can afford it either. I think they will reject it just like they did with Six Flags.

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SEAS does  not have 3.4B laying around to buy another chain.  It would be a stock/unit swap and a borrowing of money.  If it happens, it would likely follow the same pattern as when CF bought the CBS parks.  If the economy is booming, it may turn out better, but if the economy tanks, then it will be a bleak outlook.  My beloved KD would get gutted :(  But maybe KI could get another Eiffel Tower for the parking lot, and a skyride could stretch between the two to act as a transport system. ;)

 

 

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