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

[The Interpreter]

In idiot terms please?

Apollo is going public?

Only in part. As a way to allow public participation. And Apollo itself would receive no funds from this. Put another way, some of the investors want out, and in order to do so, their shares would be offered on the NYSE as a public offering...

[TH13TEEN]

^ So this could be a good thing?

[The Interpreter]

In the context of Cedar Fair, it is a not unexpected thing. It probably has nothing to do with the Cedar Fair proposed acquisition...unless one or more of the Apollo investors is so disgusted by it they now want out. Likely? No. Possible? Yes.

Would be interesting if a major buyer of the public offering was Q!

[The Interpreter]

No news as such and the article has been posted before, but a VERY insightful comment has been added by Leland Wykoff here:

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

Given how quickly these tend to disappear, and the fair use doctrine and that Mr. Wykoff intended it to be published and under common law retains the copyright to it, here it is:

In answer to LifeTimeResident--it is difficult to say if the deal will consummate.

Much depends upon the actions of the two big funds which hold approximately 27% of the shares. If they push for inclusion, via equity in the new Apollo controlled entity, it is possible they could garner the votes for it to pass.

But then, again, Apollo could fail. For those who still doubt savvy money thinks this is a stinker of a deal for Unitholders--look at the position the Knott family has taken.

The Knott family is on record as opposing the deal. These are folks adept at financing and running large resort parks. If they feel it is a bad deal for them, you can count on it being a bad deal for you.

The Knott family controls more than 3% of the Cedar Fair Units.

Given the small Unitholders disgust towards management, I think this deal may very well be scuttled by a "no" vote.

No voting will not be enough. Unitholders must then take strong action to rescue CF from the entrenched management and board.

For CF to prosper Kinsel must be sent packing. It is likely CF would not be in the position it finds itself in today had Kinsel retired, AS WAS PROMISED, shortly after the Paramount Parks acquisition.

What CF needed then, and desperately needs now, is a forward looking CEO and Management Team. The "accounts mentality" must be swept from the executive offices.

Unitholders and the company need leadership on pricing, product, and promotion. Leadership which has been absent under the likes of a past-his-prime and past-his-retirement-date Kinsel.

You can bet your Units Apollo is planning for just such a redirection in the actions in the executive offices.

For Unitholders to be rewarded they must maintain control of the company and make the necessary changes in the executive suite.

It will be interesting to see how long this remains on the Sandusky Register site. It also seems spot on in at least some ways in its analysis....

[IBEW_Sparky]

Lines 7-10 are VERY spot on!!! I can think of two more that can find the door as well!

[The Interpreter]

Cedar Fair Provides Additional Information Regarding the Special Meeting of Unitholders to be Held on April 8, 2010

SANDUSKY, Ohio, March 25 -- Cedar Fair, L.P. (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, provided additional information today in regards to the special meeting of unitholders to consider and vote on the merger agreement with affiliates of Apollo Global Management. The special meeting will be held on Thursday, April 8, 2010 at 9:00 a.m., local time, at The Sandusky State Theatre in Sandusky, Ohio (107 Columbus Avenue, Sandusky, OH 44870).

Cedar Fair unitholders are reminded that their vote is extremely important, no matter how many or how few units they own. Unitholders are advised that if they have any questions or need any assistance in voting their units, they should contact Cedar Fair's proxy solicitor, Mackenzie Partners, Inc., toll-free, at 1-800-322-2885.

About Cedar Fair

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Amusement parks in the Company's northern region include two in Ohio: Cedar Point, consistently voted "Best Amusement Park in the World" in Amusement Today polls and Kings Island; as well as Canada's Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan's Adventure, MI. In the southern region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott's Berry Farm; California's Great America; and Gilroy Gardens, which is managed under contract.

Forward Looking Statements

Some of the statements contained in this press release (including information included or incorporated by reference herein) may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to Cedar Fair L.P.'s ("Cedar Fair" or the "Company") expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond the Company's control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors could adversely affect the Company's future financial performance and cause actual results to differ materially from the Company's expectations, including uncertainties associated with the proposed sale of the Company to an affiliate of Apollo Global Management, the anticipated timing of filings and approvals relating to the transaction, the expected timing of completion of the transaction, the ability of third parties to fulfill their obligations relating to the proposed transaction, the ability of the parties to satisfy the conditions to closing of the merger agreement to complete the transaction and the risk factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the "SEC"). Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

Additional Information About This Transaction

This press release may be deemed to be solicitation material in respect of the proposed transaction. In connection with the proposed transaction, on February 10, 2010 the Company filed a definitive proxy statement and a form of proxy with the SEC and the definitive proxy statement and a form of proxy were mailed to the Company's unitholders of record as of February 12, 2010. In addition, the Company will file with, or furnish, to the SEC all additional relevant materials. BEFORE MAKING ANY VOTING DECISION, INVESTORS AND SECURITY HOLDERS OF THE COMPANY ARE URGED TO READ ALL RELEVANT DOCUMENTS FILED WITH OR FURNISHED TO THE SEC, INCLUDING THE COMPANY'S DEFINITIVE PROXY STATEMENT, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. Investors and security holders will be able to obtain a copy of the definitive proxy statement and other documents filed by the Company free of charge from the SEC's website, www.sec.gov. The Company's unitholders will also be able to obtain, without charge, a copy of the definitive proxy statement and other relevant documents by directing a request by mail or telephone to Investor Relations, Cedar Fair, L.P., One Cedar Point Dr., Sandusky, OH 44870, telephone: (419) 627-2233, or from the Company's website, www.cedarfair.com or by contacting MacKenzie Partners, Inc., by toll-free telephone at 800-322-2885 or by e-mail at cedarfair@mackenziepartners.com.

The Company and its directors and executive officers and certain other members of its management and employees may be deemed to participate in the solicitation of proxies in respect of the proposed transaction. Additional information regarding the interests of such potential participants is included in the definitive proxy statement.

MacKenzie Partners, Inc

If you have any questions, require assistance with voting your proxy card, or need additional copies of proxy material, please call MacKenzie Partners at the phone numbers listed below.

105 Madison Avenue

New York, NY 10016

cedarfair@mackenziepartners.com

(212) 929-5500 (Call Collect)

Or

TOLL-FREE (800) 322-2885

Contacts

Stacy Frole

Cedar Fair

419-627-2227

Dan Katcher / Jeremy Jacobs

Joele Frank, Wilkinson Brimmer Katcher

212-355-4449

Dan Burch / Laurie Connell

MacKenzie Partners

800-322-2885

http://www.cedarfair...eases/index.cfm

[coasterwhore]

your vote is important but we might have to call it off again with little or no warning. you will not be refunded your travel or lodging. sorry couldnt help myself. they know how the vote is going to go down. Q and knotts are the ones in control. can not wait to see how this ends. thanks to The Interpreter for all his hard work in keeping us in the loop.

[The Interpreter]

...Stacy Frole, director of investor relations for Cedar Fair, Cedar Point's parent company, said Cedar Fair also is expecting better days ahead. She pointed to forecasts in the proxy statement the company issued earlier this year....

But in its definitive proxy statement, filed Feb. 10 to make its case for the sale to Apollo Global Management, Cedar Fair revealed the four-year financial forecast it shared last year with Apollo officials.

The company projected revenues of $966.6 million in 2010, $988.2 million in 2011, $1,012.2 million in 2012 and $1,036 million in 2013. EBITDA also will steadily rise, the company forecast on page 58 of the proxy statement....

From: Roller-coaster year for amusement industry may head uphill, analyst says:

http://www.sanduskyr...ont/1983868.txt

And, of course, Mr. Kinzel & Co. want to continue to share in what they say are the bright prospects for the company, while freezing others out at $11.50 per unit.

More to come:

040810

[PREMiERdrum]

And, of course, Mr. Kinzel & Co. want to continue to share in what they say are the bright prospects for the company, while freezing others out at $11.50 per unit.

More to come:

040810

Kinzel, looking over his right shoulder, talking to unitholders:

"Trust me, $11.50 is the best this company is going to deliver. Your best bet is to get out now. Take the buyout."

Kinzel, looking over his left shoulder, talking to Apollo:

"Trust me, there is so much potential in this company. Your best bet is to keep me on. We'll all be rich!

Since I haven't yet weighed in on the top, I'll offer my $.05.

I would love to see Kinzel & CO chased out and some fresh blood in the (shiny new) corporate office.

It is nearly sickening to walk through the parks and see all the untapped potential.

They don't have a weak collection of parks by any stretch of the imagination. In fact, I'd argue that they have one of the finest collection of regional parks in the country.

They also still have an extremely strong customer following, despite their fleecing of these fine folks for the last several years (remember when food and drink prices were raised "a nickle?").

Thirdly, they have a huge fanbase in the enthusiast community. A fanbase whose first-person accounts could be used to meter and improve customer experience, if only someone would think to do so.

Finally, at the park level, they have incredible talent. Guys like Scheid, Falfas, Sphen, they're all solid leaders who "get it." On the PR side, with guys like Helbig, Innis and Edwards, they have some of the best Public and Media relations folks in the business.

All the ingredients of a highly successful company are there.

The apples, sugar, and pie crust are all out on the counter.

It's a shame the one in charge hasn't figured out how to put them together, and is much to stubborn to read a recipe.

[The Interpreter]

Kinzel put his little deal together, then some people came in and just had to start asking Q's, inserting knotts in the process...

[The Interpreter]

In its list of local firms' annual meetings, the Toledo Blade lists:

...Cedar Fair LP, awaiting outcome of special meeting April 8 on a corporate takeover by a private equity firm....

http://toledoblade.c...ESS07/100409895

Note that the quarterly analyst conference calls have also been suspended for the time being...

040810

[BoddaH1994]

Just to drop it in, as of right now NYSE: FUN is trading for $12.01 per limited partner unit. That's $.51 above the proposed buyout price, which will be voted on four days from the time of this writing.

[CoastersRZ]

Yep. Certainly makes you wonder what the final tally of votes will be in favor of the "merger." I wonder if we will actually ever know the results beyond whether or not the merger was approved/rejected. I mean, will be be given percentages of the amount of votes for the merger?

I still stand by earlier statements that it certainly does not look likely that the unit holders will grant approval for this deal. Especially given, as you noted Ryan, the unit price remains above the offer price.

[The Interpreter]

And it puts Mr. Kinzel in a very difficult position. To his would-be and wanna-be future masters, he must proclaim the company has a bright and shining future, especially with him at the helm. To the unit holders, he must paint a dire future unless they sell out (while HE keeps his investment and share in the future of the company, as does his son, who, perhaps coincidentally, is the general manager at Carowinds...)

[The Interpreter]

The Deal Professor:

Gazing Into The Crystal Ball for April:

...2. Cedar Fair. Apollo Management will refuse to raise its offer price and the Cedar Fair deal will be voted down by its shareholders. This prediction may spill over to May since Apollo, under its acquisition agreement with Cedar Fair, has the right to delay the Cedar Fair shareholder meeting until May 10.

Apollo does have the option of raising its bid price. The more open markets for high-yield debt and collateralized loan obligations could help Apollo raise more financing to do so. As at least one commentator pointed out on a prior post on Cedar Fair, Apollo has an incentive to raise its bid since good deals are hard to find in this market and Cedar Fair has the cash flow to justify a higher price. I admit I am going out on a limb here in this prediction, but I think that the price that one big shareholder, Q Investments, is looking for is a full one; unless Apollo is willing to include that firm on the deal team and share the wealth, this deal will die.

If I am correct, the real loser here is the Cedar Fair board, which pushed through this transaction. Cedar Fair's directors might want to look at adding some new blood to the board as they refinance the company's debt. Given events, they should also consider replacing Steven H. Tishman, the Rothschild managing director who is currently a Cedar Fair director. Not coincidentally, Rothschild was the financial adviser to Cedar Fair on this transaction....

(emphasis added)

http://dealbook.blog...ball-for-april/

Please note:

This is an opinion, of the original writer. It is not fact. It may turn to be accurate. Or not.

Old Terp agrees with the portions stated in red, by the way...and he seldom reveals how he feels about most news items/opinions he posts...

He would add, however, that if this prediction turns out to be accurate, perhaps the real losers are Mr. Kinzel and his family (especially his general manager son). They would have made out very, very, very, very well under this deal indeed...while freezing almost all others out at $11.50 a unit. Nice. Very nice. Not.

[Oldiesmann]

Thanks again for your insight and thoughts on the situation Terp. I don't know what we'd do without you

[The Interpreter]

Meeting On Cedar Fair Sale Set For Thursday, State Theatre, Sandusky, 9 a.m.:

Will this be it? Cedar Fair's special meeting to decide whether to let Apollo Global Management acquire the amusement park chain is scheduled for 9 a.m. Thursday at the Sandusky State Theatre....

Cedar Fair was scheduled to host its special meeting on March 16, but the meeting was postponed the night before, apparently at Apollo's request.

A Cedar Fair statement said the meeting was rescheduled to give unitholders more time to vote on the proposed acquisition or change their previously cast votes.

Both sides have the right to postpone the meeting again, although it can't be postponed past May 10.

Stacy Frole, Cedar Fair's director of investor relations, did not return a call for comment Monday....

The run-up to Thursday's meeting has been quiet so far. There have been no new SEC filings since March 17. Cedar Fair's last press release listed only the time and place for Thursday's meeting.

Q Funding, Cedar Fair's largest unitholder, has publicly opposed Apollo's planned takeover. On March 17 the company said it opposes further efforts to bring about the deal and said it would not change its stance even if Apollo offers more money for each unit.

A spokesman for Q Funding said the company has issued no statements since then.

"We're sticking with that," he said.

http://www.sanduskyr...ont/1996821.txt

[Thane Of Price Hill]

Looks like the deal is off: http://news.cincinnati.com/article/20100406/BIZ/4070314/1055/NEWS/Kings+Island+parent+ends+takeover+bid

[thekidd33]

From the above article:

"Cedar Fair also said it had adopted a shareholder-rights plan that would be triggered if an investor acquires more than 20 percent of the company."

Can someone explain what this means and the significance of it please?

[Cory Butcher]

From the above article:

"Cedar Fair also said it had adopted a shareholder-rights plan that would be triggered if an investor acquires more than 20 percent of the company."

Can someone explain what this means and the significance of it please?

Rights give owners of stock, or units in this case, the ability to buy more units or shares of stock to increase their position of ownership. This can also be called a "poison pill". Essentially, if Q Investments were to acquire 21% of the company than anyone who owns units of Cedar Fair could purchase more units at an exercisable price to keep their same level of ownership.

This is built in to make sure that hostile takeovers do not happen. The smaller unit holders or those who have significant ownership can exercise their rights to purchase more units to be sure that the party trying to launch a takeover can not do so.

I will not speak to Cedar Fair's intentions to adopt the rights plan or its relation to Q Investments interest in the company of late. However, I will say this, the board of directors has obviously been made aware of an interest by another party to launch a hostile takeover and take control of the company.

Rights plans are usually adopted by companies whose price is attractive to investors (read: low) given the value of the company.

[thekidd33]

Thanks for explanation Cory.

[Oldiesmann]

Here's the official press release on the deal:

Cedar Fair and Affiliates of Apollo Global Management Mutually Terminate Merger Agreement

- Company Adopts Unitholder Rights Plan

SANDUSKY, Ohio, April 6 /PRNewswire-FirstCall/ -- Cedar Fair Entertainment Company (the "Company") (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that it and affiliates of Apollo Global Management, a leading global alternative asset manager, have mutually agreed to terminate the previously announced definitive merger agreement.

Consistent with the terms of the agreement, Cedar Fair will pay Apollo $6.5 million to reimburse Apollo for certain expenses incurred in connection with the transaction. In addition, both parties will release each other from all obligations with respect to the proposed merger transaction as well as from any claims arising out of or relating to the merger agreement.

As a result of the termination of the merger agreement, the Special Meeting of Unitholders to be held on April 8, 2010 has been cancelled. The Company will hold its 2010 Annual Meeting of Unitholders on Monday, June 7, 2010, for unitholders of record as of April 23, 2010.

Dick Kinzel, chairman, president and chief executive officer of the Company, said, "The Board has heard from Cedar Fair unitholders and it is apparent that the merger transaction does not have the required level of investor support. We are honored and excited by the opportunity to continue to manage and operate Cedar Fair as a public company and to provide our guests with an outstanding experience.

"Our 2010 operating season is upon us, and we have already introduced major new attractions at two of our parks. Intimidator305, a 305-foot-tall roller coaster at Kings Dominion, and Intimidator, a 232-foot-tall roller coaster at Carowinds, both had very successful opening days. We hope to continue this momentum across the rest of our properties and throughout the operating season. As we execute on our business objectives, we will also be evaluating next steps to address our capital structure. The Board and management team remain committed to acting in the best interests of all Cedar Fair unitholders. We appreciate the feedback that we have received from unitholders as well as Apollo's interest in Cedar Fair and their cooperation and professionalism throughout the process."

In order to allow adequate time to evaluate all options, a unitholder rights plan (the "Rights Plan") has been adopted. The Rights Plan is designed to enable all unitholders to realize the long-term value of their investment in the Company and to ensure that all unitholders receive fair and equal treatment in the event of any hostile attempt to gain control of the Company. The Rights Plan is not designed to prevent transactions that treat all Cedar Fair unitholders fairly.

Under the plan, the rights will initially trade together with the Company's units and will not be exercisable. The rights will generally become exercisable after a person or group becomes a beneficial owner of 20% or more of the Company's units. The rights will expire on April 5, 2013, unless earlier redeemed, exchanged, or amended.

The Rights Plan was not adopted in response to any specific effort to acquire control of the Company, but as an appropriate preventative measure to ensure all unitholders are protected while the board of directors considers next steps. A copy of the merger termination agreement and the Rights Plan have been filed with the Securities and Exchange Commission and can also be found on the Company's website at www.cedarfair.com/ir/financial/sec.

About Cedar Fair

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Amusement parks in the Company's northern region include two in Ohio: Cedar Point, consistently voted "Best Amusement Park in the World" in Amusement Today polls and Kings Island; as well as Canada's Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan's Adventure, MI. In the southern region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott's Berry Farm; California's Great America; and Gilroy Gardens, which is managed under contract.

Forward Looking Statements

Some of the statements contained in this news release may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to Cedar Fair L.P.'s expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond the Company's control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors could adversely affect the Company's future financial performance and cause actual results to differ materially from the Company's expectations, including general economic conditions, competition for consumer leisure time and spending, adverse weather conditions, unanticipated construction delays and the risk factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the "SEC"). Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company's Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

This news release and prior news releases are available online at www.cedarfair.com.

http://www.prnewswire.com/news-releases/cedar-fair-and-affiliates-of-apollo-global-management-mutually-terminate-merger-agreement-89989157.html

What did Kinzel expect considering unitholders would lose money on the deal?

[The Interpreter]

FUN closed today at $12.37, up 17 cents. The big news, though, was the volume! 2,350,000 units changed hands. People getting out while the getting is good? People buying a name in the news? Q unloading units? Q buying more units?

Someone(s) who may act in concert with Q buying units?

So many questions...so few answers....

[CrashOverRided]

dont sound too good.

[The Interpreter]

The best question of all, and the most worrisome....debt covenants were very close to being breached on December 31, 2009. New, stricter versions of those covenants were to kick in the next day. As only The Toledo Blade and The Richmond Register reported at the time, Cedar Fair apparently got relief from those covenants...relief that was probably conditioned upon the merger going through. Now it has not. What next?

See my previous post in this thread:

http://www.KICentral.com/forums/index.php?showtopic=20462&view=findpost&p=361048

[CrashOverRided]

again i say "dont sound to good"

[The Interpreter]

How would a merger with Six Flags have grabbed you? That's the Q.

Being discussed over here:

http://www.KICentral.com/forums/index.php?showtopic=21132&view=getnewpost&hl=&fromsearch=1

[westcoaster]

And 6 million spent for nothing but to pay appollo, they could have invested that in one of there parks:

[The Interpreter]

If you think this only cost $6 (actually $6.5) million, that's probably not even the half of it:

* Legal fees to prepare the proxy.

* Accounting fees.

* Costs to defend the many lawsuits filed against the Board and Cedar Fair (and Apollo).

* The distraction from running the business.

and, perhaps most of all:

* The time lost that could have been spend finding real solutions to the company's problems, instead of pursuing a "pie in the sky" for management and $11.50 a unit for everybody else solution.

[The Interpreter]

From a recent (one hour ago) Wall Street Journal article posted online, a VERY brief excerpt (subscription required for full reading):

...But the clock is ticking. Cedar Fair faces increasingly tight covenants on leverage later this year. The company already violated one covenant, in 2009, forcing it to suspend its cash distribution. Further violations could force it to raise cash by selling theme parks or other property at fire-sale prices....

http://online.wsj.com

(Article is titled: Fever Pitch Over Cedar Fair

By: John Jannarone)