The Interpreter Posted January 21, 2010 Share Posted January 21, 2010 Cedar Fair Lawyer To Seek Dismissal of Lawsuits Against Apollo Sale: As lawsuits to stop the sale of Cedar Fair to Apollo Global Management go before the court today, the amusement company will try to dismiss them. Both companies filed requests late Tuesday and Wednesday asking the court to halt motions to uncover information. Dennis Murray Sr., representing Cedar Fair, said the complaints are premature, and he's requesting they be thrown out. "This would be a complete waste of time until the (unitholders) vote for (a) sale," Murray said. He also points out the "go-shop" period in which Cedar Fair could accept a better deal doesn't expire until Monday... In a new lawsuit, D. Jeffrey Rengel, Vianale & Vianale and attorneys representing John and Lynda Walker argue the offer is not only inadequate but the process leading up to the sale agreement was flawed. "The board failed to identify other companies that might have been willing to pay a higher price for the unitholders' security," the lawsuit states. Walker argues in the nine months leading up to Sept. 27, Cedar Fair reported a profit of $61.7 million on revenue of $810.5 million. More details here, which deserves to be read in full: http://www.sanduskyr...ont/1876014.txt I would suspect the present selling price of the units will not be a part of his argument. Interesting argument Murray has...don't completely waste the court's time unless the sale is approved...at which time the transaction, he implies, can then be challenged...is he presuming approval is unlikely? Does he have information that a better offer is coming from Apollo or elsewhere? Most astoundingly, Murray says: ...He added Cedar Fair wasn't acting as an auctioneer and therefore was not obligated to sell the company to the highest bidder.... So, what does he think fiduciary duty means? The Board was not obligated to sell the company to the highest bidder? Under what circumstances, assuming the buyer had the wherewithal and/or financing such that the sale could go through, would the board be allowed not to? Especially if one Dick Kinzel and a limited number of senior people under Cedar Fair, under at least one such arrangement would be mightily enriched and assured, at least for a time, of positions--both in the new company personnel-wise and being allowed to invest--under the new company while the current unit holders would be forced to sell out and lose any prospect of sharing in the future of the company if the holders of 2/3 of the units consent? Just askin' Today will be interesting... Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 22, 2010 Share Posted January 22, 2010 And now suit has been filed in Delaware seeking to block the Apollo deal: ...The lawsuit was brought by Ruth Walton, who owns 30,000 units, on behalf of all public holders of Cedar Fair units. It was filed on Wednesday in Delaware's Chancery Court against the board of Cedar Fair Management Inc, Cedar Fair's general partner.It says that management agreed to sell amid the worst recession in 70 years, during a breakdown in credit markets and at a time when bad weather had taken a toll on the business, which operates 11 theme parks, seven water parks and five hotels. A company spokesperson said Cedar Fair "believes the lawsuit is without merit and will defend itself vigorously." The suit criticizes management for failing to conduct a public auction of the business and says the "go-shop" provision, which allows the company to seek higher offers until Jan. 25, uses restrictions that unfairly favor Apollo. The suit asks the court to block the deal, or if it is consummated, to rescind it. The suit also seeks damages to be determined at a trial.... http://www.reuters.c...123430020100121 Quote Link to comment Share on other sites More sharing options...
Diamondback96 Posted January 22, 2010 Share Posted January 22, 2010 Apollo needs to come up with a better deal if this is going to go through. Quote Link to comment Share on other sites More sharing options...
KIBOB Posted January 22, 2010 Author Share Posted January 22, 2010 It looks as though with the final days of the go-shop period coming to a close, things are becoming even more intense for the resistance to the proposed sale. Mr. Kinzel is likely having another coaster built, in his head, and judging by what has been going on, that coaster may be pulling some serious G's and migrains. -Thanks terpy for keeping us informed with the latest info throughout this ride. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 22, 2010 Share Posted January 22, 2010 I wonder how he proposes to pay for it. . . Quote Link to comment Share on other sites More sharing options...
KIBOB Posted January 22, 2010 Author Share Posted January 22, 2010 With all the nickels he kept from Viacom ofcourse Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 22, 2010 Share Posted January 22, 2010 Cedar Fair Lawsuits Consolidated: After several hours of negotiations, the 11 court cases fighting the Cedar Fair sale have been consolidated into one. Nineteen attorneys deliberated in an Erie County jury room and decided the first case filed, on behalf of Indiana resident Todd Miller, would lead the legal battle against the acquisition of the amusement company. Now that the lead case has been chosen, the attorneys for unitholders who filed the suits must agree on a single amended complaint. They have until next Tuesday to send that to the attorneys for Cedar Fair and its corporate suitor, Apollo Global Management. Attorneys for the two companies have until Feb. 9 to respond.... What remains to be settled, however, is whether the lawyers will be given their request for a speedy discovery process. They argue the preliminary proxy statement that unitholders may use to help decide whether to vote for the sale may contain inaccurate or insufficient financial information. The unitholders need to prove this to argue for an injunction to stop the sale while the case is heard. To help determine if the information is faulty, Vianale [an attorney for some of the unit holders] argued they need to take depositions from financial advisors for Cedar Fair. He also questioned how two corporations, supposedly acting independently, can choose the same 16 companies for financial analysis without being questioned by the board. The 16 companies included theaters, restaurants, casinos and entertainment, but left out Disney, Great Wolf Resorts and Vail Resorts. Cedar Fair CEO Dick Kinzel's son previously worked for Great Wolf Resorts.... http://www.sanduskyr...ont/1877678.txt More details in this article from The Toledo Blade: http://toledoblade.c...INESS03/1220350 Both of these articles deserve a full reading. By the way, neither of these articles mentions the Delaware lawsuit, which the Ohio court would appear not to have the power to consolidate... Quote Link to comment Share on other sites More sharing options...
jzarley Posted January 22, 2010 Share Posted January 22, 2010 I'm sure I could find this somewhere in the 23 pages of posts...but, when does the "shopping" period end again? I'm sticking with my prediction...Apollo will come back with a revised offer of $12-12.25. (Although, with a current unit price of $12.30 as of 10:15, that's not looking like such a sweetened deal anymore, either...) Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 22, 2010 Share Posted January 22, 2010 It ends January 25, aka next Monday. Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 22, 2010 Share Posted January 22, 2010 ^^^Will the consolidated lawsuits make it easier or harder for CF and Apollo to fight? I would think it'd make it quicker, and be less of a challenge to fight. Edit: As of 11:19 am, FUN is trading at $12.60, up 39 cents, or 3.19%. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 22, 2010 Share Posted January 22, 2010 LARGEST Cedar Fair UNIT HOLDER PLANS TO VOTE AGAINST SALE; BLASTS DEAL: Q Funding III, L.P., the holder of 9.8% of the outstanding units of Cedar Fair, L.P. as of January 20, 2010, today announced that it will vote against the merger agreement providing for the acquisition of Cedar Fair by Siddur Holdings, Ltd, an entity controlled by affiliates of Apollo Global Management, for $11.50 per unit in cash, which represents a significant discount to Cedar Fair's current price....Cedar Fair closed at $12.21 per unit on the New York Stock Exchange yesterday, a more than 6% premium to the $11.50 offered by Apollo Global Management. Q Funding III is concerned that the majority of Cedar Fair's units may be held by retail holders who might be taken advantage of if they mistakenly agree to the $11.50 offer price. Cedar Fair has numerous options to unlock the value in its units, but has thus far chosen to take the path that creates the least value for all of its unit holders. Q Funding III believes other large holders intend to vote against the proposed transaction and urges all holders to do the same.... http://www.earthtimes.org/articles/show/largest-cedar-fair-lp-holder,1132940.shtml See also: ... "It does not makes sense to vote for the deal and effectively sell at $11.50 when a holder can sell in the market for a higher price," Q Funding said in a statement on Friday. Texas-based Q Funding believes other large holders intend to vote against the deal and said it urged all shareholders to do the same. On Thursday, a shareholder sued the management of Cedar Fair for agreeing to sell the company too cheaply to Apollo Management and asked a judge to block the deal, according to court documents. The lawsuit was brought by Ruth Walton, who owns 30,000 units, on behalf of all public holders of Cedar Fair units. It was filed on Wednesday in Delaware's Chancery Court against the board of Cedar Fair Management Inc, Cedar Fair's general partner. http://www.reuters.c...213711420100122 The market is responding. On a broadly down day, FUN is now trading at $12.60, up 39 cents, or 3.19 percent, and a premium of more than 9.5 percent OVER the proposed Apollo price.... Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 22, 2010 Share Posted January 22, 2010 See also: http://www.lehighvalleylive.com/breaking-news/index.ssf/2010/01/dorney_park_owner_cedar_fair_c.html Note especially the headline... Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted January 22, 2010 Share Posted January 22, 2010 For some reason, that first link takes you to a dead page (The requested page cannot be found). I believe that this is the article that you quoted and were trying to link to. I saw this happen to someone else`s link yesterday. http://www.earthtime...-fair-lp-holder,1132940.shtml It will be interesting to see what happens after Monday passes, since that is the last day the shopping period is. Have we heard a date by when the vote from unit holders is to begin and/or be concluded? And what percentage of the stock does the Knott`s family own? Correct me if I`m wrong, but wasn`t it around 7% of the outstanding units? So if they decide to vote against the acquisition along with this investment firm, that would account for nearly 16% of the outstanding units against the sale. And considering they need 2/3 for the sale, that is a pretty daunting early number, considering that it is almost half way to 1/3 already! But that also assumes that the Knott`s vote against and not in favor. Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 22, 2010 Share Posted January 22, 2010 O mai. So now either, Apollo must offer a higher price to win over the unitholders, the deal doesn't go through and Cedar Fair looks for another buyer, or Chapter 11 is in the future. This is nutso. Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted January 22, 2010 Share Posted January 22, 2010 Not necessarily. You left out the one other option. Cedar Fair could find another suitor to offer a higher value through Monday. Will that happen? Who knows. Only time will tell. I think its fair to say at this point that both Apollo and Cedar Fair have NOT been doing a good job of persuading unit holders that this sale is the best option. Especially when, as noted, the current unit price is more than a dollar more than the offer price from Apollo. Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted January 22, 2010 Share Posted January 22, 2010 It looks as though there was a very major buy and then sell-off of FUN around 3pm today according to today's stock price chart. Today the stock has traded at a high of $13.56. I will not even speculate on what this means, as this is a very large fluctuation for a stock that is supposed to be purchased for 11.50 per share. The stock at one point today was up more than 10%! There was some VERY interesting price action between 3:00 and 3:45pm. Unbelievable! Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted January 22, 2010 Share Posted January 22, 2010 And Cedar Fair has now responded to Q Funding III`s stance on the acquisition with a press release of their own. http://www.cedarfair...ry&story_id=211 Essentially, the press release states that the proposed purchase price of $11.50 represents a premium over what the units had been trading at prior to the announcement of the deal. It makes no mention of the current price of the units. FUN closed today at $12.66, up 45 cents or 3.69%. Things are certainly starting to get very interesting. Quote Link to comment Share on other sites More sharing options...
KIfan1980 Posted January 22, 2010 Share Posted January 22, 2010 From what I can tell, the CF statement was released during the hectic 3-4pm trading (after the first jump and before the sell off). Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 23, 2010 Share Posted January 23, 2010 More on all this, including a detailed timeline if the proposed deal continues: http://www.cleveland.com/business/index.ssf/2010/01/cedar_fairs_largest_shareholde.html Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 23, 2010 Share Posted January 23, 2010 Also see: http://toledoblade.com/apps/pbcs.dll/article?AID=/20100122/BUSINESS03/100129881/-1/BUSINESS Quote Link to comment Share on other sites More sharing options...
KIfan1980 Posted January 23, 2010 Share Posted January 23, 2010 And now we start to understand "the rest of the story" Some interesting points regarding the news today from the articles Terpy posted. Specifically the following quotes: "It is urging other shareholders to vote against the deal as well" - considering they own 9.8% and only filed the appropriate forms to say they owned more than 5% on Tuesday, this means they would lose a lot of money if the sale occurs at $11.50 "James Hardiman, a senior equity analyst at FTN Equity Capital Markets, said some investors appeared to be buying Cedar Fair shares over the past few weeks on a hunch that Apollo could up the ante, or that another firm would make a bid" - I'm just wondering how accurate the term "some investors" is. Prior to the announcement today, from what I can tell, only 12.5 Million Units changed hands in 2010, and Q Investments seems to have purchased 5.4 Million Units. This might explain why the unit price has been above the offer price without news "After Q Investments, the largest Cedar Fair shareholders are investment firm Neuberger Berman, which owns 8.8 percent of shares, and Cedar Fair Chairman, Chief Executive and President Richard Kinzel, who owns 2.25 percent" - So Kinzel is in 3rd with 1.24 Million Units. I'm left wondering why the Knotts Family which was reported to hold 2 Million Units isn't listed here? Have they sold some or are there multiple family members who are being considered separate owners I'm also left wondering why this announcement from Q Investments today? Could it be that the go shop period is expiring and there has been no news/rumor of the better offer they were betting on so they are trying to force Apollo into raising the offer price or have the merger voted down? I'm fascinated. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 23, 2010 Share Posted January 23, 2010 More on why may be found in the last three paragraphs of the Toledo Blade story I linked to in the post before yours, perhaps: ...Securities and Exchange Commission filings show that on Jan. 7, Amalgamated Gadgets reported it had purchased the Cedar Fair shares as the investment manager for R2 Investments LDC, a Grand Cayman registered company. But on Tuesday an amended filing listed the owner of the shares as Q Funding III, an entity controlled by Mr. Raynor and two other Texas firms, Prufrock Onshore LP, and J Alfred Onshore LLC.According to news reports from Dallas, Mr. Raynor's holdings have been estimated at $4 billion, and he has been noted for taking extraordinary stakes in distressed companies. In 2001, for example, he bought an 8 percent stake in Continental Airlines just 9 days after the Sept. 11 terrorist attacks. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 23, 2010 Share Posted January 23, 2010 ...An analyst with a private investment firm in New York said it would appear to be "very difficult" for the deal to win approval, given Q's stance.Another official, Justin Lumiere, head of the Special Situations/Risk Arbitrage Group at Summit Securities Group, said Q's statement is likely to be influential. "When you have the largest shareholder coming out and saying they're voting against it, it's easier to get other people. They're going to join in," Lumiere said.... The next-largest unitholder of Cedar Fair units is Neuberger Berman, an asset management company in New York City. According to a proxy statement Cedar Fair filed earlier this month, Neuberger Berman holds 8.8 percent of the units.... A spokeswoman for Neuberger Berman said the company had no comment.... Q Funding is controlled by Texas investment banker Geoffrey Raynor. Raynor did not respond to a request for an interview. http://www.sanduskyr...ee556195264.txt Quote Link to comment Share on other sites More sharing options...
maverick2007 Posted January 23, 2010 Share Posted January 23, 2010 So if they don't get 2/3, does Apollo just walk away empty handed? Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 23, 2010 Share Posted January 23, 2010 If I'm correct, Apollo must either convince the shareholders that this is a good idea, probably by increasing their offer, or yes, they will go home empty handed. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 23, 2010 Share Posted January 23, 2010 The proposed proxy statement does not agree with you: ...The Company must pay the full breakup fee of $19,556,700 if (i) the Merger Agreement is terminated by:• either Parent or the Company because the special meeting shall have been convened and a vote to adopt the Merger Agreement shall have been taken thereat and the adoption of the Merger Agreement by the Requisite Unitholder Vote shall not have been obtained;... (near top of page 94 of the proposed proxy statement) So, if the merger does not occur because the holders of at least 2/3 of the units do not vote for the Agreement, Cedar Fair must pay Apollo $19,556,700. Quote Link to comment Share on other sites More sharing options...
maverick2007 Posted January 24, 2010 Share Posted January 24, 2010 Apollo initiated the sale, right? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 24, 2010 Share Posted January 24, 2010 According to press reports and to Mr. Kinzel, yes...and Apollo and Cedar Fair refer to it not as a sale but as a merger... Quote Link to comment Share on other sites More sharing options...
maverick2007 Posted January 24, 2010 Share Posted January 24, 2010 Okay so Apollo initiates a deal with CF but if CF shareholders vote no then they would have to pay Apollo 19mil+? That doesn't make sense to me. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 24, 2010 Share Posted January 24, 2010 Don't ask me! The Board of Directors of Cedar Fair are the ones who agreed to recommend this to the unit holders and agreed to the penalty...of course they were operating with the best interests of the unit holders at heart, as their fiduciary duties require...or, if they were not, the pending lawsuits will determine what happens next... Quote Link to comment Share on other sites More sharing options...
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