Six Flags and Cedar Fair Merge

[BoddaH1994]

6 hours ago, jzarley said:

Herschend is also not a public company, which really impacts how a board has to approach things like ROIC, revenue and cost structures. Look at the difference between BEC and the standalone (and public) SeaWorld/Busch parks.

Not to mention, Herschend has certain values that are not consistent with the thinking of many Cedar Fair people. When we had Joel Mandy on the Attractions Group Podcast, he spoke very highly of HFE and how they truly put the guest at the center of everything.

For other Teams... "It's as adorable as it is predictable." ...and the sentiment shows.

[jzarley]

1 hour ago, BoddaH1994 said:

Not to mention, Herschend has certain values that are not consistent with the thinking of many Cedar Fair people. When we had Joel Mandy on the Attractions Group Podcast, he spoke very highly of HFE and how they truly put the guest at the center of everything.

For other Teams... "It's as adorable as it is predictable." ...and the sentiment shows.

I worked with Joel Manby when he was CEO at SeaWorld (we bonded over sharing the same first name ). Joel is a pretty good guy himself—one of the best CEOs I’ve ever worked for.

[IndyGuy4KI]

23 hours ago, jzarley said:

Herschend is also not a public company, which really impacts how a board has to approach things like ROIC, revenue and cost structures. Look at the difference between BEC and the standalone (and public) SeaWorld/Busch parks.

Definitely makes a difference on how business decisions are made.

[Oldiesmann]

Got a notification from Google about this today. I don't fully understand this but it should be of interest to some. https://investors.sixflags.com/news-and-events/press-releases/2024/04-16-2024-213022046

[MeredithGrey]

18 hours ago, Oldiesmann said:

Got a notification from Google about this today. I don't fully understand this but it should be of interest to some. https://investors.sixflags.com/news-and-events/press-releases/2024/04-16-2024-213022046

Also confused, but two thoughts...

1. Looks like this news may be confirmation that yes the merger plans are moving forward as planned, & closer to being achieved.

2. Could this basically be just news that shares of the newly formed company will be available to a select few? 

Lots of language in here that is most certainly legally mandated.

[Kenban]

20 hours ago, Oldiesmann said:

Got a notification from Google about this today. I don't fully understand this but it should be of interest to some. https://investors.sixflags.com/news-and-events/press-releases/2024/04-16-2024-213022046

This is effectively a type of loan.  Six Flags will sell $850 million dollars of IOU’s that it will have to pay back in 2032 along with interest.  This is normal and they get issued regularly.  It even states that it will be used to pay back a note due in 2025.

[BeeastFarmer]

Things should be interesting on Thursday at 830 when the two companies have earnings calls scheduled simultaneously.  

[BeeastFarmer]

[disco2000]

And this is why they can continue to bait & switch and cut hours and food quality and all the other complaints folks make....people will still show up...record Q1 revenue despite 44 net fewer operating days...

 

Highlights: First Quarter of 2024 Compared to First Quarter of 2023

• 44 net fewer operating days compared to Q1-2023.
• Net revenues totaled a record $102 million for the quarter, an increase of 20%, or $17 million.
• The Adjusted EBITDA(1) loss for the quarter totaled $97 million compared with an Adjusted EBITDA loss of $101 million in Q1-2023.
• Attendance totaled 1.3 million guests, an increase of 27%, or 290,000 guests.
• Out-of-park revenues(2) totaled a record $23 million for the quarter, an increase of 21%, or $4 million.

[KI Guy]

^Aren't those 44 removed operating days from Q1 just the days from Carowinds' and Kings Dominion's reveting back to non-year-round operation?

[Taylor.B03]

10 minutes ago, KI Guy said:

^Aren't those 44 removed operating days from Q1 just the days from Carowinds' and Kings Dominion's reveting back to non-year-round operation?

They are

[disco2000]

True, but regardless of the number of days, they posted record revenue Q1.  

The point is people complain all the time, yet more than enough people still see value and go/spend in record numbers.  So from the Board's perspective, they are doing something right and will continue to make the same decisions that many feel are ruining the guest experience...which is unfortunate to those feeling CF is devaluing the experience.

Based on all the complaints and apparent lack of marketing, one would expect to see declines, and until that happens that they cannot brush off as "weather related", expect to see more of the same cuts we see.

[disco2000]

What is the holiday Fast Lane - does he mean fright lane or is this going to be some new offering, or since it says "there" referring to CP, is this a hint of Winterfest LOL?  And of course @Tr0yfavorite the upcharge on food:

"if I think about the month of April and what we’ve been seeing continued healthy increases in food and beverage leading the way, increased extra charge, premium offering, revenue and per cap as well, part of that. And we’re just getting to where we’ve opened now Cedar Point, with Top Thrill 2, we think the premium offerings there, most notably Fast Lane and – the holiday Fast Lane and the single-use Fast Lane will be a nice lift year-over-year."

 

 

[IndyGuy4KI]

1 hour ago, disco2000 said:

What is the holiday Fast Lane - does he mean fright lane or is this going to be some new offering, or since it says "there" referring to CP, is this a hint of Winterfest LOL?

Unless they are going to have fastlane at the parks that do Winterfest this year?

[disco2000]

9 minutes ago, IndyGuy4KI said:

Unless they are going to have fastlane at the parks that do Winterfest this year?

I was wondering that, except for the part that referenced it as part of CP - but that could have been in error referencing CP?

But if it is for parks with Winterfest, how would that impact season long FL?  Carowinds did FL during Winterfest and season long was good.  Would season long not be good?

[Tr0y]

7 hours ago, disco2000 said:

True, but regardless of the number of days, they posted record revenue Q1.  

The point is people complain all the time, yet more than enough people still see value and go/spend in record numbers.  So from the Board's perspective, they are doing something right and will continue to make the same decisions that many feel are ruining the guest experience...which is unfortunate to those feeling CF is devaluing the experience.

Based on all the complaints and apparent lack of marketing, one would expect to see declines, and until that happens that they cannot brush off as "weather related", expect to see more of the same cuts we see.

Last year the “year round” parks operated at a loss. They made their corrections this year by scaling back those operating days that people weren’t visiting. 

Remember the excuse was “Bad Weather” and that was an excuse for the shareholders. In reality it showed a total incompetence of the c-suites who made that decision to go “year round” to begin with. I mean what did they really expect the weather to be during those months? Especially when the majority of the parks do not have the infrastructure to provide guests areas of refuge or things to do during bad weather.

It’s like they had this whole idea with “year round calendar” that they would operate as a soup kitchen and that would get them the numbers needed. Turns out, people still need things to do between those 4 hour meal intervals. 2 coasters and a couple of flat rides ain’t gonna cut it. 

They reduced the operating days by cutting those days that operated at a loss. At the same time they didn’t reduce the pricing, which is why they are enjoying “record profits” this quarter. It’s a short term gain, but based off the strategy that they follow there is more growth potential in a year long calendar.

The more time a guest spends in the park the more likely they are going to spend money. That is literally the strategy of CF with its “value” priced season passes. Reducing hours and cutting days goes against that model, but then again they clearly didn’t understand the other nuances that keep guest at the park. 

[disco2000]

Meanwhile over at Six Flags:

• Total revenue for first quarter 2024 decreased $9 million, or 6%, compared to first quarter 2023. 
• Total attendance was 1.7 million guests, a 6% increase from the prior year,
• The $6.53 decrease in guest spending per capita compared to first quarter 2023 consisted of a $5.77 decrease in admissions spending per capita and a $0.76 decrease in in-park spending per capita. 
• The company had a net loss of $83 million in first quarter 2024, compared to net loss of $70 million in first quarter 2023. The loss per share was $0.98 compared to loss per share of $0.84 in first quarter 2023, driven by lower revenue.

Who is coming out the winner in this merger....

[Tr0y]

11 minutes ago, disco2000 said:

Meanwhile over at Six Flags:

• Total revenue for first quarter 2024 decreased $9 million, or 6%, compared to first quarter 2023. 
• Total attendance was 1.7 million guests, a 6% increase from the prior year,
• The $6.53 decrease in guest spending per capita compared to first quarter 2023 consisted of a $5.77 decrease in admissions spending per capita and a $0.76 decrease in in-park spending per capita. 
• The company had a net loss of $83 million in first quarter 2024, compared to net loss of $70 million in first quarter 2023. The loss per share was $0.98 compared to loss per share of $0.84 in first quarter 2023, driven by lower revenue.

Who is coming out the winner in this merger....

CF posted a net loss of 133 million, compared to SIX’s 83 million in the same quarter.

“Record profits” yet CF still took a big L.

 

[disco2000]

17 minutes ago, Tr0y said:

CF posted a net loss of 133 million, compared to SIX’s 83 million in the same quarter.

“Record profits” yet CF still took a big L.

 

Don't forget the big bonuses c-suite gets for the merger...

[DispatchMaster]

The most glaring issue is that revenue is up while per caps are down. This may indicate that the parks are attracting low-spend guests/pass holders at the expense of driving away a more lucrative customer. But by the time that problem becomes impossible to ignore, those C suite folks will deploy their golden parachutes and move on to their next failure.

[Outdoor Man]

1 hour ago, DispatchMaster said:

The most glaring issue is that revenue is up while per caps are down. This may indicate that the parks are attracting low-spend guests/pass holders at the expense of driving away a more lucrative customer. But by the time that problem becomes impossible to ignore, those C suite folks will deploy their golden parachutes and move on to their next failure.

I AGREE!

Spring is a hard financial time for parks to navigate, because you are right, the parks are filled with a lot of Season Pass holders and school groups who are there at a discounted price. It would be a hard sell to the "General-Admission-Paying" public to pay full ticket price for:

• a truncated experience by a park that closes, sometimes, 3 hours earlier than >Memorial Day.
• days packed with thousands of kids from school groups.... many of whom tend to be "brats"
• unpredictable weather: hot/cold rain/humid. At least in Summer you know it's going to hot as hades and any humidity storm will be there and gone within 30'ish minutes.

It will be an interesting summer. Studies published by professionals affiliated with IAAPA are predicting a good year for seasonal parks. Even if the economy continues a downward trend people will shift into staycation mode and spend money here as opposed to... Orlando.

And, yes- the C-Suite folks generally ALWAYS know where the golden parachutes are; and I'm pretty sure that the suite dwellers from the company -approaching financial hardships- trying to merge with the suite dwellers from the company with a -history of financial hardships- know keenly where the keys to unlock the parachute cabinet are.

Edited May 14 by Outdoor Man
my bad grammar

[DispatchMaster]

Agreed that Q1/Q2 can be difficult, but per caps going down seems to have been a relatively constant trend in both quarterly and annual reports, at least based on my admittedly-sporadic reading of them.

And yes, it does seem that there's somewhat of a lull in post-pandemic travel, and that does indeed provide an opportunity to regional parks. But it arguably would have provided an even bigger boost had CF continued on the more premium product trend under Ouimet. Imagine the per caps they could have extracted in Mason/Sandusky/Charlotte/etc. from guests who had become accustomed to Orlando vacations!

[Taylor.B03]

Saw in an article talking about the merger mentioning that it's slated for some time between June 26th - 30th. So, unless something comes up that could delay it, I'd start thinking about it late next week.

[DiamondbackFan]

https://investors.sixflags.com/news-and-events/press-releases/2024/06-18-2024-120108856

June 18, 2024

SANDUSKY, Ohio & ARLINGTON, Texas--(BUSINESS WIRE)-- Cedar Fair, L.P. (NYSE: FUN) (“Cedar Fair”) and Six Flags Entertainment Corporation (NYSE: SIX) (“Six Flags”), today announced that they notified the New York Stock Exchange (“NYSE”) that the closing of Cedar Fair and Six Flags’ previously announced merger of equals (the “Mergers”) is expected to occur on July 1, 2024 (the “Expected Closing Date”). The completion of the Mergers is subject to the satisfaction or waiver of a number of conditions set forth in the merger agreement relating to the Mergers, including the satisfaction of regulatory conditions.

Six Flags today additionally announced that its Board of Directors has declared a special dividend of $1.53 per share of Six Flags common stock. The dividend is payable on July 1, 2024 to stockholders of record of Six Flags as of June 28, 2024 who hold their shares through the closing of the Mergers. The special dividend is conditioned on the closing of the Mergers and is being declared in accordance with the terms of the merger agreement. Accordingly, the record date and payment date may change based on the actual closing date of the Mergers.

Until the Mergers are complete, Cedar Fair’s units and Six Flags’ common stock will continue to trade on the NYSE. Upon the closing of the Mergers, (i) Cedar Fair’s units, which currently trade on the NYSE under the ticker symbol “FUN” and (ii) Six Flags’ common stock, which currently trade on the NYSE under the ticker symbol “SIX,” will cease to be listed on the NYSE following the closing of the Mergers and will each be deregistered under the Securities Exchange Act of 1934, as amended. Immediately following the closing of the Mergers, the combined company will be renamed “Six Flags Entertainment Corporation” and trading of the combined company’s common stock on the NYSE is expected to begin on the day following the Expected Closing Date, July 2, 2024, under the ticker symbol “FUN.”

 

https://investors.sixflags.com/news-and-events/press-releases/2024/06-18-2024-120509559

June 18, 2024

SANDUSKY, Ohio & ARLINGTON, Texas--(BUSINESS WIRE)-- Cedar Fair, L.P. (NYSE: FUN) (“Cedar Fair”) and Six Flags Entertainment Corporation (NYSE: SIX) (“Six Flags”), today announced the senior management team that will lead the combined company following the completion of their previously announced merger of equals (the “Mergers”).

As previously announced, upon closing of the transaction, Richard Zimmerman, President and Chief Executive Officer of Cedar Fair, will serve as President and Chief Executive Officer of the combined company and Selim Bassoul, President and Chief Executive Officer of Six Flags, will serve as Executive Chairman of the combined company’s Board of Directors.

After completion of the Mergers, the following leaders will report to Zimmerman in the combined company:

Tim Fisher, Chief Operating Officer (currently in same position at Cedar Fair)

Brian Witherow, Chief Financial Officer (currently in same position at Cedar Fair)

Brian Nurse, Chief Legal & Compliance Officer, and Corporate Secretary (currently in same position at Cedar Fair)

Christian Dieckmann, Chief Strategy Officer (currently in same position at Cedar Fair)

Gary Mick, Chief Integration Officer (currently Executive Vice President and Chief Financial Officer at Six Flags)

“We are fortunate to have a proven team of leaders who bring decades of park operating experience and significant expertise in integrating businesses and achieving synergy targets for the combined company,” said Zimmerman. “Their insights and complementary skill sets will be instrumental as we combine two of North America’s iconic amusement park companies and forge a new future together.”

The closing of the Mergers is expected to occur on July 1, 2024, subject to satisfaction or waiver of a number of conditions set forth in the merger agreement, including the satisfaction of regulatory conditions. Upon closing of the transaction, the combined company will operate under the name Six Flags Entertainment Corporation, trade under the ticker symbol “FUN” on the NYSE, and be structured as a C Corporation. The combined company will be headquartered in Charlotte, North Carolina, and will maintain significant finance and administrative operations in Sandusky, Ohio.

[DispatchMaster]

Under competent CF management, it would be welcome to see CF executives take the helm of the combined entity, but Zimmerman & Co. are not what I consider to be competent management.

[CoastersRZ]

Keep in mind that they still need to get approval for this merger to go through.  Yeah, I am sure that budget cutting will continue.  It will be interesting to see what changes, if any, materialize for the season pass products for 2025.

[IndyGuy4KI]

8 minutes ago, CoastersRZ said:

Keep in mind that they still need to get approval for this merger to go through.  Yeah, I am sure that budget cutting will continue.  It will be interesting to see what changes, if any, materialize for the season pass products for 2025.

Approval from who at this point? Didn't both sides of shareholders already vote? I though the last hurdle was the government which sounds like they may have worked out?

[CoastersRZ]

From the press release: "The completion of the Mergers is subject to the satisfaction or waiver of a number of conditions set forth in the merger agreement relating to the Mergers, including the satisfaction of regulatory conditions".  And "Important risk factors that may cause such a difference include, but are not limited to: the expected timing and likelihood of completion of the Mergers, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Mergers;" I don`t believe that they have secured the DoJ approval for the merger yet...

[KI Fan75]

It’s coming! 

[BeeastFarmer]

5 hours ago, CoastersRZ said:

From the press release: "The completion of the Mergers is subject to the satisfaction or waiver of a number of conditions set forth in the merger agreement relating to the Mergers, including the satisfaction of regulatory conditions".  And "Important risk factors that may cause such a difference include, but are not limited to: the expected timing and likelihood of completion of the Mergers, including the timing, receipt and terms and conditions of any required governmental and regulatory approvals of the Mergers;" I don`t believe that they have secured the DoJ approval for the merger yet...

I'd conjecture they have met, or are well on the way to meeting the regulatory conditions/approvals.  They would jeopardize market outlook if they did not, indeed, merge.

I wonder if divesture would part of those conditions?  I think there are three markets that have any overlap, and CGA is on a limited timeline.