CoastersRZ Posted February 11, 2010 Share Posted February 11, 2010 Exactly. The first article you quotes stated 25%. Still, that means that of the remaining unit holders, only 8% would need to vote no to effectively block the merger from occurring. And all unit holders who do not vote will have their votes added to the "against" the merger tally. At this point, it looks as if this merger is not going to happen. But to quote the famous saying, its not over until the fat lady sings. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 And she could sing in court, too.... Don't forget that...in either Ohio or Delaware.... Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted February 11, 2010 Share Posted February 11, 2010 Yep. There is even a section that mentions court injunctions and delaying or stopping the merger process in the definitive proxy that Cedar Fair filed with the SEC. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 And a section that mentions numerous ways Apollo could elect not to proceed with this matter if certain pre-conditions are not met...including certain debt to equity ratios in particular, just to mention one...(what is it that is supposed to be announced after market close tomorrow again?*) *a rhetorical question, kiddies Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted February 11, 2010 Share Posted February 11, 2010 I assume that the delay in announcing their earnings is a result of the proposed acquisition. This will also be the first quarter in which unit holders will NOT receive a cash distribution. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 There is only one day of trading after the earnings announcement...the record date...which is Friday. This is...interesting. Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted February 11, 2010 Share Posted February 11, 2010 And it will be interesting to see how the unit price responds both tomorrow and on Friday. Quote Link to comment Share on other sites More sharing options...
KIfan1980 Posted February 11, 2010 Share Posted February 11, 2010 It will also be interesting to see what happens to the unit price when Q-Investments (Mr. Raynor) decides that he owns enough units and decides to stop adding to his holdings. Considering the following: FUN was trading below the $11.50 Apollo offer price when Q began investing in Cedar Fair Q has been the buyer of more than 35% of the units traded since he initially announced his intention to oppose the deal (an extremely high amount in my opinion for a publicly traded entity) Even with his ongoing purchases, the price is dropping and closed at the offer price today One could wonder what the unit price would be if Apollo wasn't offering $11.50/unit and Q wasn't buying units. Recall, prior to the announced sale, investors felt FUN was worth $9.08/share My completely uneducated guess as to what will happen: Q continues to prop up the price and buy until they can guarantee the vote against this deal When Q stops buying and there is no other offer on the table (and based upon the results to be reported and a suddenly more realistic potential of bankruptcy), the unit price drops like a rock Q then completes a hostile takeover and implements it's plan for the parks. Note that I'm betting Q's plan probably looks a lot like the Apollo plan (refinance the debt, operate the parks for a year or two while implementing cost cutting procedures before selling the parks to another buyer in better economic times and making lots of money). Why would this work better than the Apollo approach - Q is willing to "share" the benefit with other unit holders (Q won't end up owning the whole company) instead of current management (who is planned to be paid handsomely by Apollo). This will enable the support necessary from 2/3 of the unit holders to allow it to happen. Note: FUN trading and Q ownership research completed at form4oracle.com and etrade.com Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 But, but, but... Remember, Cedar Fair LP is a limited partnership. The limited partners do not control the management of the company and cannot run it. They DO choose the Board of Directors, but it is staggered, with only a few members coming up for re-election at a time. Also, as we have seen, the holders of 2/3 of the units must consent to a conversion to a stock company or to a "merger." And Friday is the record date. That means to vote by proxy, at or attend the special meeting, one must have owned units tomorrow, Friday. Mr. Rayor's entities could dump virtually all (or even all, though I doubt they would do that for several reasons) their units Monday and still vote them all on March 16. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 On the way out the door, I find this: http://dealbook.blogs.nytimes.com/2010/02/11/cedar-fair-sets-date-for-apollo-vote/ Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 As I gather information, I will be posting it from time to time. First, this: The End of Cedar Fair's Ride?: This deserves a full read, but: ...But that is an aside on what is now the main driver of this transaction — Apollo’s willingness to raise its bid and the possibility of a settlement. There appears no indication for either of these events right now, but a month is a long time in the corporate arena. http://dealbook.blog...dar-fairs-ride/ Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted February 11, 2010 Share Posted February 11, 2010 I am re-posting what I posted in the FUN Earnings Release topic, as it is directly important to this thread in particular. Cedar Fair Reports Full-Year and Fourth Quarter 2009 Results http://finance.yahoo...9.html?x=0&.v=1 As rollerNut stated this looks top be a decent earnings release, but, one very curious item is included: Year End EBITDA for 2009 was $299,900,000 (299.9 Million). From the Proxy: (Emphasis mine) Parent may also terminate the Merger Agreement if the Company does not deliver a certificate certifying its calculation of EBITDA (as defined in Exhibit A of the Merger Agreement) for the four fiscal quarters ending December 31, 2009 by the earlier of the date the Company files with the SEC its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 and March 1, 2010, if such certificate states that EBITDA (as defined in Exhibit A of the Merger Agreement) four fiscal quarters ending December 31, 2009 is less than $311,800,000 or if the Company experiences a Material Adverse Effect (as defined in "The Merger Agreement – Conditions to the Merger" beginning on page 91). EBITDA for 2009 came in at more than $11.9 Million BELOW the required amount in the transaction. I will let you ponder to yourselves how this affects the transaction... Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted February 11, 2010 Share Posted February 11, 2010 Well if I`m reading it correctly, it means that the Parent, which in this case is Apollo, has the right to terminate the transaction because the EBIDTA did not meet their figure. However, it simply states that they have the right to terminate if they so choose to do so. It doesn`t mean that they will withdraw their proposal. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 11, 2010 Share Posted February 11, 2010 Why would they do so? If they wait for this to be voted on and it does not pass, they are entitled to certain parting gifts under the merger agreement.... Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 12, 2010 Share Posted February 12, 2010 On March 16, a large gathering of men and women wearing business attire will gather at a regal former vaudeville house, the Sandusky State Theatre in Ohio. There, they will vote on whether the Cedar Fair Entertainment Co., the parent company of Knott's Berry Farm, should be purchased and taken private by asset manager Apollo Global Management. In addition to determining the future of Knott's, the vote, if successful, could sever the last direct ties the Knott family has with the park that bears their name. The folks at the theatre should be in for a show: The outcome is far from certain, despite Cedar Fair officials' urgings that investors approve the $2.4 billion deal.... http://ocresort.free...tts-sale/34239/ Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 12, 2010 Share Posted February 12, 2010 Cedar Fair, Apollo want judge to toss lawsuit: ...Cedar Fair argues in its response to the lawsuit that unitholders have not made a case that Cedar Fair's management team was negligent or that they failed to make an effort to find the best deal. They argue they worked to bring unitholders the best price offer for their units before the Apollo deal and afterwards continued with a "go shop" period to attract an even better offer.They argue that a judgment made by a company in the course of conducting business should be upheld and is protected from second guessing by courts. Unitholders have claimed those involved in the merger worked within their own interests. Cedar Fair counters that its board acted independently, and that board members own units themselves and would want to get the best offer possible for their own gain.... http://www.sanduskyr...ont/1912299.txt Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted February 12, 2010 Share Posted February 12, 2010 hmmm..."best offer possible for their own gain"...uh....oops? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 14, 2010 Share Posted February 14, 2010 A deal born of a debt load: Cedar Fair will be OK, with sale or without, analysts say: ...But industry experts don't think the operator of 11 amusement parks and six water parks across the country will have difficulty reducing its debt or staying solvent whether the deal is completed or not."They've been pretty tight-lipped about a scenario that involved them remaining public, or what is their financial condition going to be like," said Jeff Thomison, an analyst with Hilliard Lyons LLC of Louisville. "I've posed the question, but only got some answers. They're seemingly not anxious to talk about it." ... And its Kings Island park will benefit by Six Flags' announcement this month that it is closing its Kentucky Kingdom amusement park in Louisville, a two-hour drive from Cincinnati.... Given that Q Funding has paid $12 for some of its shares, would $13 be good enough for it to cash out? Probably not, Mr. Lumiere said. "I think they're just kind of waiting it out to see what Apollo does. The question is how much do they want. They don't want $13. They're looking for $15, $16." http://toledoblade.c...5/-1/BUSINESS06 This one definitely deserves a full read. I do not agree with the viewpoints stated wherein it is implied the two largest investors may well be happy to be passive investors and not affect current management, other than issue a directive or two, such as to sell land... Note also what coaster is depicted in the photo, and what feature is present on that coaster... Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted February 14, 2010 Share Posted February 14, 2010 Good point Terpy, we are being thrown for a loop! Ugh... Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 14, 2010 Share Posted February 14, 2010 Well, I hope you don't mind if I point out that I feel that what passes for insightful analysis in that article is loopy at best. It's also more than a little rough. Quote Link to comment Share on other sites More sharing options...
Cory Butcher Posted February 14, 2010 Share Posted February 14, 2010 Would you say that it could give a rational man a headache? Is it possible the author was hyper? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 14, 2010 Share Posted February 14, 2010 ...or so used to covering Cedar Fair that he sees their prospects with a rosy outlook regardless of what? I honestly wonder just how he thinks Cedar Fair is going to comply with the debt covenants and/or get new financing if the Apollo deal, as looks likely, does not proceed to fruition. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 19, 2010 Share Posted February 19, 2010 Feb. 18, 2010, 5:27 p.m. EST · Q Funding Sends Letter to Cedar Fair Unitholders Urging Them to Vote Against the Pending Transaction with Apollo Global Management Largest Cedar Fair Unitholder Notes Transaction Substantially Undervalues the Company and Ignores Other Alternatives to Return Value to Investors... FORT WORTH, Texas, Feb 18, 2010 (BUSINESS WIRE) -- Q Funding III, L.P. and Q4 Funding, L.P., which together own approximately 18 percent of Cedar Fair, L.P.'s units, sent the following letter to the company's unitholders today urging them to vote against Apollo Global Management's proposed acquisition of the company. A full text of the letter follows: February 18, 2010 Dear Fellow Unitholders of Cedar Fair, L.P.: As the largest unitholder of Cedar Fair, we urge you to vote AGAINST the proposed acquisition of our company by Apollo Global Management. This transaction, we believe, substantially undervalues the company. Apollo Global Management late last year made an offer to acquire all units of Cedar Fair for $11.50 per unit. Cedar Fair's Board recently sent you proxy materials asking you to approve the transaction even though the proposed buyout price represents what we believe to be a "bargain basement" price struck during one of the worst economic climates this country has ever seen. We are Cedar Fair's largest unitholder with currently approximately 18% of the units, and we are voting AGAINST the transaction. We urge all other unitholders to do the same. It is unfortunate that throughout this past year the units have declined as the company both endured the recent recession and battled increasingly restrictive covenants under its bank agreement, all resulting in the suspension of distributions to unitholders. Apollo Global Management, a very sophisticated investor, is evidently trying to take advantage of this "perfect storm" of events to buy the company for well below what we believe to be its inherent value, particularly given the improving economy and financial markets. In our opinion, this is the exact wrong time to sell the company. Since the transaction was originally announced, we believe the bank funding markets have continued to improve, and we also believe the company may be able to negotiate with its current bank group to allow some cash distributions to unitholders. In our view, as evidence the bank funding markets are improving, we need to look no further than Apollo Global Management's success in securing approximately $1.95 billion in debt to help finance their potential transaction, a figure that is higher than the $1.63 billion of debt that Cedar Fair had outstanding on its balance sheet as of December 31, 2009. We are a firm believer in this company and feel that as the economy improves, it has every chance of returning to the same unit valuations it achieved before the recession. We hope that you feel the same way and will join us in voting AGAINST this transaction. Sincerely Yours, Q Funding III & Q4 Funding Vote AGAINST the proposed acquisition of our company by Apollo Global Management! You should be receiving Cedar Fair's proxy materials directly from the company. We are not soliciting proxies, so please cast your vote AGAINST the acquisition directly on Cedar Fair's proxy card by submitting your proxy by phone, internet or by checking the "AGAINST" box on the proxy card you receive from Cedar Fair and signing, dating and returning the card to the company. If you have any questions or need assistance in voting your units, please call D.F. King & Co., Inc., which is assisting us, toll free at 1-800-735-3591. Only your latest dated proxy card counts so you can change your vote even if you have previously voted. The Special Meeting is scheduled for March 16, 2010. SOURCE: Q Funding III, L.P. and Q4 Funding, L.P. Abernathy MacGregor Tom Johnson, 212-371-5999 http://www.marketwat...nk=MW_news_stmp Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted February 19, 2010 Share Posted February 19, 2010 Wow. This company is really working hard to get this merger denied. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 19, 2010 Share Posted February 19, 2010 And, should they succeed, I strongly believe they have other plans, which we will then see... Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted February 19, 2010 Share Posted February 19, 2010 Are the addresses of unit holders available to the public I guess? Part of me would think they would be private, but the other half of me sees why they are public. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 19, 2010 Share Posted February 19, 2010 The addresses are available to any unit holder who wants to solicit proxies or recommend how to vote on management proposals... Quote Link to comment Share on other sites More sharing options...
IndyGuy4KI Posted February 19, 2010 Share Posted February 19, 2010 The addresses are available to any unit holder who wants to solicit proxies or recommend how to vote on management proposals... So you are saying it is legal to do this? I would think CF would have something to say about this?? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted February 19, 2010 Share Posted February 19, 2010 Cedar Fair has no choice in the matter. They also have the right to solicit proxies and lobby for or against any proposal, a right they exercise, by the way. This is management's proposal that the company "merge" with Apollo, with Messrs Kinzel, Falfas, etc., keeping an interest in the company going forward whilst current unit holders would be forced to sell at $11.50 per unit, should the proposal pass. Quote Link to comment Share on other sites More sharing options...
Coney Islander Posted February 19, 2010 Share Posted February 19, 2010 And, should they succeed, I strongly believe they have other plans, which we will then see... Are you speaking of the 'hostile takeover' you mentioned earlier?, or maybe the heads of the company changing the way they do things completely? Quote Link to comment Share on other sites More sharing options...
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