On March 15th the volume closed at over 2 million units. And the price went up 10%, no doubt partly due to the rumor that the price Apollo is willing to pay would go up. Today looks like a case of sell the news before you see the news, and lots of people taking profits.

Unit holders probably realized the chances of Apollo increasing their bid, or that the increased bid would be accepted was low and took what they could get. Edit: Actually after looking closer, it looks like an institutional investor dropped quite a few units near 3:00, and then some large investor probably came right back in at the bargain. Or, there were lots of option plays. Take your pick!

Cedar Fair has been an off-season roller coaster for some of us watching this whole ordeal!

Kinda like health care reform we are learning a ton about stock options work

Extremely high volume and unusual trading activity in FUN today.

Close $12, down 20 cents or 1.64 percent on 1.6 MILLION units, or nearly three percent of ALL units outstanding.... VERY unusual. So much so it was identified by several stock tracking services as having "unusual activity."

http://online.wsj.com/article/BT-CO-20100317-712735.html?mod=WSJ_latestheadlines

Q NOT INTERESTED IN HIGHER BID FOR ITS UNITS:

CLEVELAND, Ohio -- Cedar Fair Entertainment Co.'s largest shareholder said today that it would continue to oppose the company's proposed sale to Apollo Global Management no matter the price....

...Q Investments said in a regulatory filing that its opposition to the sale was "not a matter of price." The firm, which owns 18.1 percent of Cedar Fair, said it would not support any transaction that does not allow it to "participate in the long-term value of the business."...

Q Investments said in its letter that it is afraid delaying the shareholder meeting could affect Cedar Fair's ability to refinance its $1.7 billion outstanding debt by causing it to violate covenants and, potentially, to default....

(emphasis added)

http://www.cleveland...areholde_1.html

What ARE they up to?

This one deserves a FULL read.

The last paragraph I quoted poses the question about the covenants I have asked from the beginning....

Get your popcorn ready!

I have believed this from the beginning. For SOME reason, Q wants these parks, or at least they want current management gone....they believe they can extract value from the assets, and do so long term, by changing management and how the parks are run.

This I truly believe.

Q isn't conserned about shareholders getting a good value for the sale, he's conserned with stopping the sale at all costs. Why? Well, that's the Q....

No...I don't think so. I think they believe that a sale now at this low priced market does the current unit holders a disservice. I also think they believe they can run the parks so well that they can extract a huge benefit, both for themselves and for others. Do I think they are altruistic? Of course not. Do I think they see huge opportunity amidst current management bungling, especially in a financial way? Yes.

After all, the current CEO says he is an operations guy, not a finance guy. And somehow, Apollo is to take on the same debt, keep the same management and achieve better results, while freezing out current unit holders at $11.50 a unit? How nice.

by changing management and how the parks are run.

This I truly believe.

Oooh, crap... that can't be good...

Why not?

Current management got the company into this mess...

Terpy, pointing out that change, without being more clearly defined, is just change...

I am trying to follow this whole thing. There is no way I can read every article that is posted. I have to ask. Do the Cedar Fair parks make money?

All of them? With all of this debt, what was it 1.7 billion? If the parks make a profit every year won't the debtors make a deal to keep them from filing bankruptcy, and risk getting nothing? If Q thinks the parks need better management, then they think the potential is there to have a profitable chain. They think Apollo is just trying to come in and scoop up a great deal at a Rock bottom price. Is that right?

I think that is a very good summary.

And yes, the Cedar Fair parks make money...but perhaps not enough to carry the crushing debt load that Mr. Kinzel & Co. got Cedar Fair into, partly by overpaying for Paramount Parks and identifying synergies that did not pan out.

Some bondholders may well have insurance that covers them ONLY in the event of a bankruptcy. It is rumored Fidelity Investments had such insurance in the case of Six Flags, and forced a bankruptcy in order to collect the proceeds, as opposed to consenting to a restructuring.

...On March 16, 2010, the Reporting Persons sent a letter to the Board of Directors of Cedar Fair, L.P. highlighting the following issues:

• The Reporting Persons expressed concerns regarding reports that Cedar Fair, L.P., is continuing discussions with Apollo Global Management about an increased offer price and stated that it is not a matter of price for the Reporting Persons and therefore they are not supportive of any such effort. Instead, the Reporting Persons believe in the potential long-term value of this business and want to be long-term holders. They will not support a transaction that forces them to surrender their units and does not provide them with an ability to participate in the long-term value of the business.
• The Reporting Persons stated that they find it disappointing that the special meeting was delayed. Now that the special meeting has been delayed, and may be delayed until May 10, 2010, it only heightens the Reporting Persons' concerns about the status of the company's bank debt. Consequently, they believe it is important for the board to request that Apollo Global Management allow the company to begin discussions about various alternatives with its current bank group as soon as possible. If Apollo Global Management declines to grant such permission, the Reporting Persons are worried about potential covenant violations and a potential default leading to a liquidity crisis. But for Apollo Global Management's restrictions, the Reporting Persons believe the company could come to a prompt, positive resolution with its bank group, which could generate much value for its unitholders by removing uncertainties arising from the company's debt overhang.

http://www.sec.gov/A...arfair13da5.htm

The Reporting Persons means Q.

so q sits back and watches it all come crashing down and pics up the pieces and takes over? nice here we go ki fans even more cut backs. wonder what goes first? im sure there are some things that could be stopped to save money.

I think that is a very good summary.

And yes, the Cedar Fair parks make money...but perhaps not enough to carry the crushing debt load that Mr. Kinzel & Co. got Cedar Fair into, partly by overpaying for Paramount Parks and identifying synergies that did not pan out.

Some bondholders may well have insurance that covers them ONLY in the event of a bankruptcy. It is rumored Fidelity Investments had such insurance in the case of Six Flags, and forced a bankruptcy in order to collect the proceeds, as opposed to consenting to a restructuring.

I'm actually excited by this news from Q. It indicates they are not just in the game to make a quick buck (higher sale price on their and units from a raised Apollo offer). They obviously believe that CF has a long term potential to be profitable even with the high debt load. At this point, to me at least, I think Apollo seems more like the make a fast buck company than Q. They came in with a pick up the pieces from the trash heap lowball offer. .

And Q has not offered Mr. Kinzel & Co. many millions of dollars and the opportunity to stay while offering other unit holders $11.50 per unit while freezing them totally out of the company's future.

if Q wants to build cf back up then im all for it. i still have a lot of friends there and i dont want them to get the shortend. they survived the paramount days and the cf sale and hopfully they will survive the Q

Let me say this and say it clearly. I have NO idea how this is going to end up. I do know this. IF Q ends up with Cedar Fair (and that is going to be quite the feat if they pull it off), they will almost certainly oust current management. But there are many things that could happen yet, from Apollo raising its offer, the litigation having some ruling no one anticipates, a loan default, another suitor...the possibilities are virtually endless. But, make no mistake about it, absent this Q deal, I'd not have been too surprised if Apollo had ended up with the parks at a presumably slightly higher price than $11.50 per unit, perhaps. Because of Q, this entire matter has gotten far more attention than it otherwise would have.

I also think Apollo would have ousted current management, gladly paying them the severance just to get them out of the company. They did this with Claire's. Why would Cedar Fair have been any different? THAT is why you suddenly hear Mr. Kinzel claiming to be an operations guy. Keep me, I know how to operate the parks, he now implies...

Dick Kinzel, Cedar Fair's Board of Directors and Apollo KNOW what the current ballots reveal...and that undoubtedly is that they do NOT have the votes to proceed...and they are now very unlikely to ever get them.

so q sits back and watches it all come crashing down and pics up the pieces and takes over? nice here we go ki fans even more cut backs. wonder what goes first? im sure there are some things that could be stopped to save money.

And you think Apollo won't do the same? Remember, this is the same company that is rumored to merge both Six Flags and Cedar Fair together should they acquire SF. That's 35 parks to govern; I can already see that number cut in half within two to three years should Apollo be given the green light.

I'm not saying Apollo is any better. Ki is in the middle. Either way senior mngt is gone. Q seems to be the winner because it can block the deal. This whole thing is a mess. If cf had let someone else buy the park maybe this wouldn't have happened. If the sale goes bad I would guess more cost cutting if that is even possible. Any thing not essential is in the cross hairs

Tom Jackson of the Sandusky Register actually has a very good recap of where things stand as of this morning:

http://www.sanduskyregister.com/articles/2010/03/18/front/1970618.txt

KNOTTS VOTED NO!

...Besides Q Funding, mutual fund Neuberger Berman LLC, which controls shares totaling 9.6 percent, was against the deal. And yesterday, Stephen R. Knott, of Cedar Fair's Knott's Berry Farm theme park in California, said the family's shares totaling 3.6 percent were cast as "no" votes....

Add Q's 18.1 percent and you are already at 31.3 percent no votes. Even if no one else voted no, if only 2.1 percent of the units' ballots were not returned...

http://toledoblade.c...INESS03/3180354

This sale is officially, not happening.

Well, not officially not....yet.

I thought we knew that the Knotts were voting no a while ago?

Nope. They had been very non-committal. Or non-comment-al.

... Stay tuned, the gyrations may not be over, so traders and investors need to be very careful. The ball is in Apollo's court, to make a higher offer, do nothing, or something completely different that may involve the two large institutional shareholders. Or, they could walk away. Many of Cedar Fair's individual shareholders wouldn't think that's a bad thing....

http://stocks.investopedia.com/stock-analysis/2010/Cedar-Fair-Deals-Wild-Ride-FUN-DIS-WOLF-CCL-RCL0319.aspx

The Price of Goofs In Deal Making:

... In hindsight, a last-minute postponement of a shareholder meeting that has a significant number of retail investors might lead to quite a scene. In fact, that is what happened as Cedar Fair postponed its meeting at approximately 9:00 p.m. the evening before but the unitholders showed up anyway (Cedar Fair is a partnership and so it has unitholders instead of shareholders).

From reports, it appears that the only person to greet them from Cedar Fair was a forlorn investor relations person, Stacy Frole. Ms. Frole, who no doubt was thinking that she didn't sign up for this part of the job, barred the unitholders from the meeting place. The unitholders then had their own "meeting" on the street outside complete with minutes, all of which are on the Web site of The Sandusky Register, the local paper in Cedar Fair's home town in Ohio. It was a nice try by the unitholders, but not a valid corporate act.

In some news reports, Cedar Fair appeared to blame this postponement on Apollo Management, because the firm has a contractual right to demand the delay. It does, but Cedar Fair agreed to this provision, making argument a bit tendentious. For future deal lawyers, take note of this and certainly don't yourself show up at such a meeting if you can't avoid such a last-minute announcement. Or at least remember to advise your client to try to announce the postponement a bit more in advance to avoid such scenes. In Cedar Fair's case it may have been unanticipated or unavoidable, but still an act that produced more harm than good.

Meanwhile, the Cedar Fair deal also brings us an example of the importance of details. After the postponement, Q Investments — which owns 18 percent of Cedar Fair — issued its latest missive. The firm said that it believes "in the potential long-term value of this business" and wants to be a long-term holder. Q Investments added that it would not support a transaction that forces it to surrender its units and does not provide "an ability to participate in the long-term value of the business."

Note the missing detail: Q Investments does not say that Cedar Fair should remain a public company, simply that Q should continue as an investor. This letter can be read as an open invitation for Apollo to negotiate a deal with Q to become part of the buyout group....

http://dealbook.blog...in-deal-making/

Apollo Global Management Seeks $50 Million Offering on NYSE:

http://dealbook.blogs.nytimes.com/2010/03/22/apollo-seeks-50-million-offering-on-n-y-s-e/

http://www.businesswire.com/portal/site/home/permalink/?ndmViewId=news_view&newsId=20100322007045&newsLang=en

In idiot terms please?

Apollo is going public?

The comments section of this particular Sandusky Register article address post 687 above:

http://www.sanduskyregister.com/articles/2010/03/22/front/doc4ba7a145540f3414696569.txt