The Interpreter Posted January 7, 2010 Share Posted January 7, 2010 I can see how you thought that...I meant IF Comcast gets approval to buy NBC Universal AND decides to keep the parks...I could also see Comcast selling its interest in the parks to Blackstone or on the open market. Note that the California Universal park is wholly owned by NBC Universal, unlike the one in Florida... Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 7, 2010 Share Posted January 7, 2010 I wonder why Blackstone only bought part of the one in Florida? (maybe because of owning more parks in Orlando) Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 7, 2010 Share Posted January 7, 2010 Because only a part of it was for sale. Vivendi, the French company, also once had an interest in the Universal parks there. Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 7, 2010 Share Posted January 7, 2010 I meant, I wonder why they didn't buy park of the one in California, too. Was only part of the one in Orlando for sale and not part of the one in California? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 7, 2010 Share Posted January 7, 2010 Exactly. The California park is much, much older. The Florida park complex, and especially IOA, was one of the most expensive investments ever made in the theme park industry. Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 7, 2010 Share Posted January 7, 2010 To bring up a post from a little earlier: Blackstone, Disney (though doubtful they'd be interested), HERCO, and a new company formed for that purpose composed of former park execs who had run one or more of the Cedar Fair parks in years past...just to name four... (the latter is NOT that much of a stretch..same way KECO was formed to buy the parks from Taft...) Oh, who is HERCO? The company that runs Hersheypark...a trust, more accurately... Would you consider any of those to me more likely than the Apollo deal happening? (not considering the law suites and votes; suppose the Apollo deal could go through with no problems) Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 7, 2010 Share Posted January 7, 2010 At this point, Mr. Kinzel and company have in effect put the company in play. If a suitor shows up with the money to buy the company at more than $11.50 per unit (and the assumption of the debt), it will be sold IF...two things, one probably a larger factor than the other: * the lawsuits do not stop it (which is very unlikely that they would), and * the holders of 2/3 of the units vote to affirm the sale (which may prove to be very difficult, given the impressions management has made upon the unit holders about the debt being manageable, the company's future bright and the management being the most capable and fit possible) Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 7, 2010 Share Posted January 7, 2010 Cedar Fair's unit price rose in heavy trading Wednesday, prompting speculation that Apollo Global Management might be preparing a better offer or another suitor might be courting Cedar Fair. Apollo has offered $11.50 per unit if unitholders will OK its offer to acquire Cedar Fair, a 28 percent premium over the price when officials agreed to the deal in December. On Wednesday, Cedar Fair's unit price rose as high as $11.84 before closing at $11.63. Trading was heavy, with 1,361,327 units changing hands. The numbers suggest investors believe Apollo might up the ante or someone else might come along, said Randy Hunt, branch manager and senior vice president with Stifel Nicolaus & Co. in Sandusky.... A portfolio manager at a firm that holds Cedar Fair stock said Wednesday he also noticed the trading activity. He assumed it was based on speculation that other companies might be interested in acquiring Cedar Fair. The name mentioned most often is the Blackstone Group, which, like Apollo, is a private equity company... And then Stacy Frole, after saying she had no comment on the unit price, commented about the volume... http://www.sanduskyr...ont/1846376.txt Quote Link to comment Share on other sites More sharing options...
jzarley Posted January 7, 2010 Share Posted January 7, 2010 I can see how you thought that...I meant IF Comcast gets approval to buy NBC Universal AND decides to keep the parks...I could also see Comcast selling its interest in the parks to Blackstone or on the open market. Note that the California Universal park is wholly owned by NBC Universal, unlike the one in Florida... From what Comcast has said in the past related to the parks, it doesn't sound like they have much of an interest in owning them for the long haul. Heck, even when they were trying to acquire Disney a few years back, they were talking about selling off the Disney parks to a third party, or spinning them off in their own IPO. If they didn't have interest in owning the Disney parks (whose revenues are huge in comparison to anyone else), I can't imagine them having continued interest in the Universal parks... Even at $12-13 a unit, CF would be a really good deal for someone. My money would also be on Blackstone as a potential suitor. At any rate, with the stock trading in the high $11's right now, I can't imagine the Apollo deal going thru as currently offered. My guess is that Apollo will either sweeten the deal (maybe into the $12-12.50 range), or an offer from another party will be coming. Just think if Blackstone did end up buying CF and the remaining interest in Universal...combine that with BEC and Merlin and they would have a HUGE park empire. Imagine what that "platinum pass" would get you!!! Quote Link to comment Share on other sites More sharing options...
KIBOB Posted January 7, 2010 Author Share Posted January 7, 2010 I can see how you thought that...I meant IF Comcast gets approval to buy NBC Universal AND decides to keep the parks...I could also see Comcast selling its interest in the parks to Blackstone or on the open market. Note that the California Universal park is wholly owned by NBC Universal, unlike the one in Florida... From what Comcast has said in the past related to the parks, it doesn't sound like they have much of an interest in owning them for the long haul. Heck, even when they were trying to acquire Disney a few years back, they were talking about selling off the Disney parks to a third party, or spinning them off in their own IPO. If they didn't have interest in owning the Disney parks (whose revenues are huge in comparison to anyone else), I can't imagine them having continued interest in the Universal parks... Even at $12-13 a unit, CF would be a really good deal for someone. My money would also be on Blackstone as a potential suitor. At any rate, with the stock trading in the high $11's right now, I can't imagine the Apollo deal going thru as currently offered. My guess is that Apollo will either sweeten the deal (maybe into the $12-12.50 range), or an offer from another party will be coming. Just think if Blackstone did end up buying CF and the remaining interest in Universal...combine that with BEC and Merlin and they would have a HUGE park empire. Imagine what that "platinum pass" would get you!!! Yes, but imagine what that "platinum pass" would cost lol. -Your total for your purchase today: 1 arm and 1 leg.- Quote Link to comment Share on other sites More sharing options...
mtl2013 Posted January 7, 2010 Share Posted January 7, 2010 Oh, ok thank you. I was just unaware of what was actually going on, because I havnt gotten the chance to check out th einfo in a while. thanks Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 8, 2010 Share Posted January 8, 2010 Cedar Fair to file proxy statement with SEC approximately/by 5:30 p.m. today, other details to date: http://www.cleveland.com/business/index.ssf/2010/01/cedar_fairs_share_price_rises.html Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 8, 2010 Share Posted January 8, 2010 The proxy statement is online: http://www.cedarfair.com/_upload/pressreleases/010810%20-%20fun%20prelim%20proxy.pdf Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 8, 2010 Share Posted January 8, 2010 FROM PAGE 36 of SAID PROXY: ...the constraints of operating within the Company's existing capital structure, includingthe expected breach of the distribution suspension covenant contained in the Credit Agreement at the end of 2009 and limited operating flexibility with respect to the total leverage covenant contained in the Credit Agreement, both of which would become more restrictive on December 31, 2009; • the need to refinance the Company's current indebtedness, likely at higher costs and with more restrictive covenants than under the Credit Agreement in light of changes in the capital markets since entering into the Credit Agreement in 2007;... As I have said all along, the company will SOON breach at least some of the covenants of its existing financing. Apparently, The Motley Fool was correct all along when it opined that Cedar Fair was a "going broke candidate." At best, financing absent a sale is going to be very, very difficult for the current company. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 8, 2010 Share Posted January 8, 2010 From page 63 of the proxy: ...The term of Mr. Kinzel's employment agreement will be three years and the term of each of Messrs.Falfas, Crage and Decker's employment agreements will be five years. The annual base salary for each of these executive officers will be substantially similar to such executive officer's current base salary subject to future annual increases (but not decreases) as determined by Parent's board of directors. In addition, each of Messrs. Kinzel, Falfas, Crage and Decker will be eligible to receive an annual bonus under a bonus plan to be adopted by Parent, contingent upon the achievement of performance-based goals to be established annually by Parent's board of directors. Each of these executive officers will also be eligible to participate in the employee benefit plans available generally to senior executives of the Parent and its subsidiaries. Upon commencing employment with Parent, each of Messrs. Kinzel, Falfas, Crage and Decker will (i) individually invest in an agreed upon amount to purchase shares of the Parent’s common stock coincident with the Merger and (ii) be awarded stock options to acquire shares of the Parent’s common stock. Such stock options will be awarded pursuant to an individual award agreement under an equity incentive plan to be adopted by Parent and will be forfeitable, and not exercisable, until certain vesting conditions are satisfied (generally, continued employment and/or satisfaction of certain performance-based goals). Specifically, Messrs. Kinzel, Falfas, Crage and Decker will invest $5,500,000, $1,000,000, $250,000 and $150,000, respectively, to acquire shares of the Parent’s common stock, and will be granted non-qualified stock options to purchase 1.32%, 0.80%, 0.48%, and 0.16%, respectively, of the shares of Parent common stock, as of the closing of the Merger. The price per share to be paid by each of Messrs. Kinzel, Falfas, Crage and Decker in connection with their investment and the exercise price of each their stock options will be equal the economic equivalent (on an as-converted basis) of the price paid by the Investors for the Company in connection with the Merger.... Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 9, 2010 Share Posted January 9, 2010 Terpy, if you get time tonight or this weekend, will you please post what this proxy statement is saying (in general)? From the quotes you posted, the head people from CF will recieve the same salary, stay in contract, and will recieve stock? Also, if the deal doesn't go through, CF won't be able to pay of some of the debt, probably causing the creditors to call all debt, and then CF possibly filing for bankrupcy? *I feel bad for the people who have to pay attention to such minute details and write these reports, deals, the CF conference calls, etc that are so lengthy. Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 9, 2010 Share Posted January 9, 2010 Translation, please? All this financial and economic stuff is even worse then Mandarin Chinese to me. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 There is no such thing as distilling a proxy like this one. It does appear, as I have said earlier, that the Board of Directors sees itself as having little choice but to recommend this "merger" (which is, in reality, a sale). Interestingly, Mr. Dick Kinzel abstained from the recommendation, given his future role in the company, should this sale be approved. Current incentives (bonuses) to the senior managers become payable if the transaction goes through. And the senior executives must buy into the parent company. I must add, merely because large cash payments must be made to senior management if they are not retained does not necessarily mean the new company intends to retain them. And... Two things that must be remembered: The "go shop" period is currently underway. Unless the holders of 2/3 of the units vote for this to proceed (and the current market price is higher than the offered price), this "merger" will not happen. I highly commend reading, in particular, pages 22-35 of the proxy, which make clear how Cedar Fair sees itself as having gotten into this predicament and why the Board of Directors thinks this is in the best interests of the unit holders. 1 Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 And now the preliminary proxy statement is also available on the SEC website: http://www.sec.gov/Archives/edgar/data/811532/000119312510003599/dprem14a.htm Quote Link to comment Share on other sites More sharing options...
Diamondback FOF Posted January 9, 2010 Share Posted January 9, 2010 First off, thanks for the explanation. Did you read the entire proxy? Anyways, why would a 'merger' or sale like this require senior executives to buy into the new parent company ? From post #255, you quoted: Such stock options will be awarded pursuant to an individual award agreement under an equity incentive plan to be adopted by Parent and will be forfeitable, and not exercisable, until certain vesting conditions are satisfied (generally, continued employment and/or satisfaction of certain performance-based goals). To make sure those executives perform and work to the best of their abilities? Also, if those execs are not kept in the company, I assume they would not have to buy into the parent company; they would just get a payment or severence package, if you will. Is this correct? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 Read the second part of the quoted portion here: http://www.KICentral.com/forums/index.php?showtopic=20462&view=findpost&p=356744 Yes, those executives are required to invest in the parent company. One can assume that should they be let go at some time in the future, they could sell the stock in the parent company, which is currently not publicly traded... And yes, I have scanned the whole proxy, and will read it more thoroughly later. It is interesting reading. I am glad it is not my job to convince the unit holders to vote for this transaction, which will greatly benefit senior management of Cedar Fair LP, while cutting current investors entirely out of any future financial participation in the company (including losses...though current management has steadfastly, til now, insisted the future was bright, the debt manageable and the senior management the best obtainable on this or any other planet). Quote Link to comment Share on other sites More sharing options...
Scott Evans Posted January 9, 2010 Share Posted January 9, 2010 http://en.wikipedia.org/wiki/Apollo_Management- for complete information about the new owner. My concerns: Apollo is just as debt laden if not more so than Cedar Fair, however it is spread out across industries but some of the companies in their portfolio are scary, such as Countrywide. Private equity firms have the reputation of coming in, downsizing operations, and then reselling the parts. Bain capital's purchase of Clear Channel is an example of this...there was a reason that one talk host did 2 shifts per day over the holidays on WLW, budgets have been sliced into the bone at Clear Channel. A lot of Apollo's portfolio is in real estate, though that market should begin to climb in the next couple of years. The positives about Apollo. Looking at what they did to their other entertainment oriented properties, namely cruise lines, they expanded offerings rather than cutting them, mainly in the cruise industries building at least 3 new ships for two of the cruise lines and I believe NCL has plans for a new ship as well. So this could very well be a positive for future growth at the park. If there is new mgt at the park maybe we could talk them into going retro with The Racer, turning it backwards once again and adding the water effects back to the Stunt Coaster. Quote Link to comment Share on other sites More sharing options...
CoastersRZ Posted January 9, 2010 Share Posted January 9, 2010 Well, for starters, you linked to a Wikipedia topic in which they do not even have an article on! Secondly, Wikipedia is not a very reliable source of information since it is open source, and anybody can edit it, regardless if the edited information is credible or not. Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 The Sandusky Register's take on the proxy statement: In the fall of 2009, Cedar Fair's executives were weighed down by the company's mountain of debt and saw no easy solution. An attempt that began about three years ago to sell three amusement parks to raise cash failed when no one made any serious offers. It didn't help when the credit markets began to decline in mid-2007. A plan to sell more equity units also fell through. Officials slashed cash distributions to unitholders nearly in half in early 2009, but that still didn't ease the company's financial woes. It needed a lifeline to stay afloat.... (emphasis added)As I often say, this article deserves a full reading. It goes on to quote "Steven Kaplan, an expert on private equity who teaches at the University of Chicago" speculating that Apollo may indeed intend to retain Mr. Kinzel and the senior managers: ...The explanation makes sense because Apollo has a reputation for handling restructuring of debt, said Steven Kaplan, an expert on private equity who teaches at the University of Chicago. If that plays out, there wouldn't be dramatic changes in how things are run at Cedar Point and other Cedar Fair parks, he said Wednesday."So business would go on, and what Apollo would be doing would be financially engineering the capital structure so that the company has more room to operate, and wait for the economy to pick up," Kaplan said. "In that case, you would not see a whole lot change in the immediate short run, other than they would figure out a way to restructure the debt."... This gentleman is known for being brilliant. I find his use of the words "in the immediate short run" to be evidence of that noted brilliance. No matter what happens here, when others look back on this, he will have been right. Almost certainly. No matter what. http://www.sanduskyr...e1108843301.txt Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 9, 2010 Share Posted January 9, 2010 Just like Mr. Speigel and his Looping Diving Splashing Vertical Drop Coaster? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 Mr. Speigel is also brilliant, and sometimes does that which the industry wants him to do. It got attention for Kings Island, did it not? Is that not what the park wanted? It added additional excitement and anticipation for the then coming announcement. Mr. Speigel has a long, storied history in this industry...no one need to ask when he will get his reputation diamond back. How is what he said all that different from: Ride Sally Ride? Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 9, 2010 Share Posted January 9, 2010 So aside from increasing hype for upcoming attractions, what is it that Mr. Speigel does? He works at International Theme Parks or some other such name which I've never heard of, and have never heard his name since Diamondback. What is that company's purpose, anyway? Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 He doesn't just "work at" that firm...he founded it and is the president! He and his associates advise and consult with theme parks the world around. He is considered a genius at what he does...and he has a long association with Kings Island I'll let some of the other noted posters here tell you about... Or you could read his bio: http://www.interthem...yees/dennis.htm As to what the company does: http://www.interthemepark.com/about/about.htm Quote Link to comment Share on other sites More sharing options...
Beast1979 Posted January 9, 2010 Share Posted January 9, 2010 So they basically advise parks and provide them with "Years of experience and knowledge." Sounds like one heck of job, just telling amusement parks what they think is best to do! Quote Link to comment Share on other sites More sharing options...
The Interpreter Posted January 9, 2010 Share Posted January 9, 2010 Getting back on topic, somehow I doubt ITPS advised Cedar Fair to acquire Paramount Parks. Not that Mr. Kinzel & Co. would have listened in any event. There is supreme irony in the fact that Cedar Fair LP was organized as an LP largely so that the unit holders would have no say in the day to day operation of the company. And now, unless the holders of 2/3 of those units assent, Mr. Kinzel & Co. are in deep doo doo...and may be even if they do. Richly rewarded financially under the terms of current and proposed contracts, but deep doo doo regardless. Even that rich reward carries irony. Asking unit holders to accept $11.50 per unit while they themselves exit the LP with bags and bags and bags of money. . . Quote Link to comment Share on other sites More sharing options...
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