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Six Flags and Cedar Fair Merge


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Overnight a deal went through for Cedar Fair and Six Flags to merge. Below are some of the details on the merger. Are you happy, sad, or indifferent. Please reply with your comments below.

"Cedar Fair L.P. FUN and Six Flags Entertainment Corp. SIX said Thursday they have agreed to a merger of equals valued at about $8 billion including debt. Under the terms of the deal, Cedar Fair unitholders will receive one share of common stock in the new combined company for each unit owned, while Six Flags shareholder will get 0.5800 shares of common stock in the new entity for each share owned."

https://www.marketwatch.com/amp/story/cedar-fair-and-six-flags-agree-to-merger-of-equals-valued-at-about-8-billion-including-debt-c4cc01ea?fbclid=IwAR219AfqrzX2Gfz5DkDxaFxnC3o7cXTmE-xB6_pf332Ca-sJn4SsM7Laef0

 

Cedar Fair News Release: https://www.cedarfair.com/news

 

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I'm honestly in shock. I have so many questions. 

Quote

The new company will operate under the Six Flags name and trade as “FUN” on the New York Stock Exchange.

It makes sense that the company will be called "Six Flags" since the name is certainly more well known. Will the Cedar Fair parks be renamed? Will the rides be renamed? Are we going to get a bunch of clones? This will be Kings Island's sixth owner. I'm excited and terrified at the same time.

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I don't see how this is a good move for CF in the long term, though it does explain the Zimmerman-led, Six Flags-esque moves in recent years - the destruction of gate integrity via the Gold Pass being the most obvious.

More troubling than that is that this does not feel at all like a "merger of equals" considering CF unitholders don't get a vote, and that the new entity will be Six Flags, while the two companies have similar valuations despite SIX having twice as many parks in the portfolio. This reeks of short term desperation from FUN, and SIX taking advantage of that desperation.

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2 minutes ago, Invertigo99 said:

It makes sense that the company will be called "Six Flags" since the name is certainly more well known.

Yes, well known as a bunch of crappy parks with parking lot coasters and dismal operations. Well known is not the same as being a premium brand. 

This is bad from every angle aside from perhaps the CF board, who have apparently had this in mind for a while. It would explain the SIX-like destruction of the gate with the Gold Pass, and Ouimet's sudden departure right after agreeing to a new 3-year term. It looks like CF wanted to pump up the numbers using the SIX model (low gate price, try and make it up on volume), and when that turned ugly (look at today's CF earnings report), SIX pounced on them.

Just a disgusting turn of events from what Ouimet did to improve CF.

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This is like a dream but also like a nightmare. Historically competition has been good for both chains to build bigger and better thrills. I personally hope we see more of Cedar Fair leadership in control of the new combined company because frankly CF has better parks and builds better rides. Six Flags has been cost cutting like crazy and the new coasters/rides they build are frankly just not exciting. When was the last time Six Flags built anything by B&M? I hope this merger will pull six flags up but I'm afraid that it'll drag Cedar Fair down. 

Another thought - it seems as if Six Flags is the one taking the lead here. Correct me if I'm wrong but Cedar Fair is essentially becoming part of six flags? So does that mean that the parks are going to get renamed? How about rides? I really liked the direction CF was going at parks like KI and KD with the new themed lands which have unique stories unlike six flags that just themes everything for a DC character and slaps the same labels on everything at every park. 

Of course  another concern for me personally is the older rides and rollercoasters... Six Flags has been removing old rides and rollercoasters at an aggressive rate! Most of their Woodies are rough and don't receive the love that the ones at Kings Island need. What is the future of Cedar Fair's collection of Arrow coasters under the new merger plan? Sure maybe there is a bigger resource for scrap parts/trains but I fear for arrow loopers and suspended coasters. If the new business motto is six flags policy I think we'll see a lot of older rides removed in the next ten years and they will be replaced with dumb clones that pale in comparison.

One final thought, what happens to parks that exist in the same city or geographic area? For example Magic Mountain/Knott's? Some of the other parks are rather close together as well... I personally think we'll see more parks close and land sold if there is a demand for it. (See California Great America)

Oh side note: the two Great America parks will finally be reunited under the same ownership for the final years because CGA closes! Ironically kinda cool from a historical standpoint.

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2 minutes ago, Sixflags82 said:

I don't really see that tbh, theres nothing but good signs in everything that has been released, and keep in mind that Cedar Fair will still be the majority share holder

They take the name six flags, each company is represented equally on the board of directors, CF unitholders don't get a vote on this, and CF is 51.2% owner - while it is a majority, it isn't a large one.

With the board of directors being equal, all it takes is one CF director to align with SIX on a vote, discussion, etc.

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1 minute ago, disco2000 said:

With the board of directors being equal, all it takes is one CF director to align with SIX on a vote, discussion, etc

Which you know is going to happen. The last thing they want is for a bunch of factions within the board. "Oh I'm a CF guy" and "Well I'm a SF gal" etc. From a standpoint of wanting to move forward successfully I think everyone will do their best to get along and compromise. 

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4 minutes ago, SonofBaconator said:

Don’t be surprised if certain parks get sold off in the coming years. I wonder how the new chain will prioritize what parks get what since parks like KI, CP, Carowinds, & Canada’s Wonderland now exist in a company that owns Magic Mountain, Great Adventure, Great America, & Fiesta Texas.

I think the small parks will suffer the most. The parks listed above will get most of the investments. The smaller parks like frontier city and Dorney Park will probably never see a new coaster again (unless it's a cheap clone). 

 

This also brings up the question of will another company such as Merlin or Sea World try to buy certain parks that the new Cedar Flags company decides they want to cut from their roster? 

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I have a very strong feeling that CF did not go into this giving up their free will. It’s a merger, but from what it sounds it’s not something where the parks are going to be SIX’d out the gate. 
 

I’m definitely shocked by this, and I will be looking into this more later today.

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I don't even know where to begin. First, I want to say thank you Cedar Fair for keeping our wood coasters up and in such good shape. I now 100% appreciate the track work done over the past few years. I know change is hard for a lot of people. I tend to think I am not one of them, but I am having a very hard time thinking what this will mean for our current CF parks.

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If a SIX park and a FUN park coexisted profitably prior to the merger, there is absolutely no reason that they can't coexist after the merger.

2 minutes ago, SonofBaconator said:

...Michigan’s Adventure...

Selling MA would be about the dumbest move imaginable, given it enjoys some of the CF chain's highest margins relative to revenue.

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8 minutes ago, johnjniehaus said:

I wonder if they will let me use my Six Flags Gold Membership (the old one where you pay $6.59 a month) at Kings Island now? Do you think they are finally going to cut off the old memberships or will they still be grandfathered in? 

Since it won't be official and closed and all that good stuff until early 2024, it wouldn't surprise me if they wait until 2025, but then again who knows, they might want to get that spending going early.

If they do allow folks that have a pass from either chain to visit the other in 2024, then that sucks for those that bought passes to both and folks that bought the more expensive CF pass.

Caveat emptor

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8 minutes ago, RollerColt said:

Monopolies are never a good thing for the consumer. This is a win for Cedar Fair but a loss for us.

How is this a monopoly? Regional amusement parks are peanuts compared to the larger destination entertainment providers. Also throwing around monopoly doesn’t really make sense in this context given for the most these parks aren’t near eachother.

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43 minutes ago, disco2000 said:

And certainly they knew this before season passes started to go on sale....Would this have changed peoples purchasing decision - waited/skipped, etc.

Caveat emptor ;)

 

Which is why I laugh at people who foolishly jump to save that ridiculous $5-10 on what can be a $1400+ pass…. Wait until after Jan 1.  I know I was already on the fence as I get mine to spend park days down here with two special people, and now Im going to stay even more firmly planted on that fence until some of this garbage plays out.

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2 minutes ago, Benjamin22 said:

How is this a monopoly? Regional amusement parks are peanuts compared to the larger destination entertainment providers. Also throwing around monopoly doesn’t really make sense in this context given for the most these parks aren’t near eachother.

Enthusiasts have this fantastical opinion that a nontrivial number of Park X's guests are cross-shopping with Park Y, to the point they're convinced KI and CP are in competition when they are quite obviously not.

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