Is Cedar Fair is the new owner of Paramount Parks?

[italianchef]

I can see Cedar Fair purchasing PKI to dominate the Ohio/Midwestern theme park market.

However, for some reason I don't think that the company has deep enough pockets to purchase all 5 Paramount parks. And if it does - what will happen to Star Trek The Experience????

I suppose we'll have to wait and see.

Have a great day!

Italian Chef

[Delirium13]

Nevermind

Edited April 6, 2006 by Delirium13

[WooferBearATL]

Well you never name a source as they could get fired for leaking this info. Just know that they do work for Cedar Fair HR Dept and they have been told this info to start getting people in line to take over.

I think anyone that has experience in this area can tell you that this is not how it happens.

The new owners likely will organize a team to take over the parks. They would not tell the HR Departments anything about preparing for anything.

[WooferBearATL]

I can see Cedar Fair purchasing PKI to dominate the Ohio/Midwestern theme park market.

However, for some reason I don't think that the company has deep enough pockets to purchase all 5 Paramount parks. And if it does - what will happen to Star Trek The Experience????

I suppose we'll have to wait and see.

Have a great day!

Italian Chef

I predict that the park chains may be broken up.

I can very well see that all the parks are not included in one deal.

[The Interpreter]

And finally, not only could someone in HR get fired for leaking this information (which they SHOULD be, even if they did have it to start with), they could be in very serious legal trouble with the Federal Government, specifically the SEC, and with individual shareholders. Anyone who did have this type of information and leaked it is hardly an admirable source...they are more correctly described as a despicable person who can't be trusted with information that they had access to only as a trusted associate, and violated that trust. Wonderful. Just wonderful.

It's certainly up to the mods, but I'd recommend this entire thread be deleted, or at least that the subject line be changed.

And that's not to say that it's impossible that Cedar Fair is buying Paramount Parks (it is possible but highly unlikely), but that the subject line is very misleading...

[The Interpreter]

I also think it somewhat likely that the Canadian park may not go with the others in the sale...it may have a separate buyer. I am sure CBS will sell the parks together or separately, whichever ways brings the most shareholder value ($$$).

[Kong-Fu-Guy]

Cedar Fair did NOT BUY THE PARKS wanna know why?!? because you posted no proof and the "buyer" who did buy paramount parks is a theme one. ill get a pciture of proof.

[The Interpreter]

Oh, joy.

Here we go again!

[Kong-Fu-Guy]

However who ever did buy the park is still in amusment park so question is , who really bought it?

and it use to say ohios biggest themed park.

[The Interpreter]

No one has bought it. . .yet.

The sale is "well underway."

[Kong-Fu-Guy]

Nope some one bought ,it look at my picture. This is last year we will see ownd by paramount. AND let me point out paramount king's island was a theme park not an amusment park.

[jzarley]

I can see Cedar Fair purchasing PKI to dominate the Ohio/Midwestern theme park market.

Of course, there's also the danger of having all of your eggs in one basket...especially for an industry that uses weather as its favorite reason for slumping attendance or earnings. I actually think that Carowinds would be the most attractive park for CF since that would give them a presence in the southeast... (Maybe Wonderland, but becoming an international company opens a whole other can of worms...)

I agree with the point that if this source really is telling the truth, the SEC should find it very interesting. Having worked for public companies, I've always had to sign ethics agreements saying that I would never release proprietary information that in anyway could be considered "insider." This case would certainly qualify...not only would this HR employee deserve being fired, but he/she may have put themselves into some legal jeopardy as well. (Which, is the really ironic part, because generally I've found HR people to among the most paranoid people you'll ever meet )

[The Interpreter]

There has been no sale, as of yet.

And that type of announcement isn't made by subtle changes on a website.

[Losantiville]

Oh no not another one! I certainly do not believe anything that is stated until it is official. Cedar Fair Execs would tell NO ONE! After the problems Cedar Fair had with buying Visionland it is safe to say that only a hand full of EXECS know what if anything is really happening. For those that do not remember Cedar Fair announced the intent to purchase Visionland in Alabama only to have the deal turn sour. I am sure they are going to make all completely official before any such leak or announcement.

[Reclaimer]

So they changed the tagline of the website...that doesn't mean "SOLD"

[Losantiville]

Nope some one bought ,it look at my picture. This is last year we will see ownd by paramount. AND let me point out paramount king's island was a theme park not an amusment park.

What picture?

Edit never mind I see it. What does that mean! Whopeee They added a word to the site.

[Kong-Fu-Guy]

LOOK! PKI ISNT AN AMUSEMENT PARK

[Losantiville]

It is an amusement park as well as a theme park, not every ride/attraction has a theme. All they are doing is broadening the scope. THEMED AMUSEMENT PARK Nothing major there!

[The Interpreter]

There have been major changes in the PR and website people at Paramount.

This change means exactly....nothing.

[Losantiville]

I suppose since Cedar Point just upgraded their website they were sold as well?

[jzarley]

Nope some one bought ,it look at my picture. This is last year we will see ownd by paramount. AND let me point out paramount king's island was a theme park not an amusment park.

Yeah, well there's the most definitive proof anyone could ever want... No use in waiting to read it in the WSJ.

Jeeesh....

[The Interpreter]

Not to mention he thinks Paramount owns the parks now.

They do not.

CBS does.

Sigh.

Sometimes explaining finance on this board feels much the same as trying to teach pigs to sing in French.

[Captain Picard]

If you say CF don't have deep enough pockets you have to add in what Paramount Parks would add to their pockets. If they had to pay more than they can make back from them, I don't think anyone would buy them.

If they can show the money is there, the financing wouldn't be a problem.

I bet there is a way if someone like CF bought they could run it as a separate business all together.

[jzarley]

If you say CF don't have deep enough pockets you have to add in what Paramount Parks would add to their pockets. If they had to pay more than they can make back from them, I don't think anyone would buy them.

If they can show the money is there, the financing wouldn't be a problem.

I bet there is a way if someone like CF bought they could run it as a separate business all together.

The big concern is the debt that a company the size of CF would have to take on for a purchase of this size. CF's market cap is in the neighborhood of $1.5B, and they have about $500M in outstanding debt. Assuming they finance the entire acquisition, their corporate debt would increase by 200% in one swoop. That tends to make shareholders and analysts a little antsy.

It's the incredible debt load (over $2B) that put Six Flags in so much trouble...it only takes a few bad earnings seasons to reduce your credit rating, which causes you to pay more for the money you already borrowed, which makes it harder to invest capital dollars into the parks, which makes you miss earnings targets, which reduces your credit rating even more, and so on, and so on...

Of course, it can be done. CF has a good track record and strong management. If they wanted the financing, I imagine they could swing it. I think a much safer soltuion would be to go in 50/50 with an investment firm (like Blackstone) that could share the risk and the balance sheet exposure, but CF could manage the parks.

Usually when a company takes on an acquisition of a company of similar size, it's done as a combination of cash and stock (where the stockholders in the acquired company get shares in the new combined company). However, since CBS wants to unlock the value of the theme parks from their balance sheet, it doesn't make sense that they'd want to trade their own theme park unit for stock in someone elses. (Most reports I've read says that CBS wants to use the proceeds from the sale to reduce some of their own debt, and to buy back a substantial portion of their stock.)

[flightoffear1996]

The thing is however that if Cedar Fair did buy Paramount Parks most of the park to myh knowdelge are making money. If would take time but they couuld pay of the debt.

[Captain Picard]

Yes it looks bad when you use only CF numbers but Paramount parks would be making them money. They should have 2x the money with 2x the park chain.

I agree it would be the next Six flags if it does happen. It's the same magic billion dollar number that kills Universal Orlando the way I understand it.

[jzarley]

The thing is however that if Cedar Fair did buy Paramount Parks most of the park to myh knowdelge are making money.  If would take time but they couuld pay of the debt.

Yeah, I understand your point. Keep in mind, though, Wall St. is seldom that logical in the way they view these things

If you would buy Microsoft tomorrow it would be a profitable investment for you...but you still need a way to come up with the $287B to purchase it. (And a way to keep paying on it if the business hits a rough patch.)

In theory, the 30 parks in the SF chain should have produced enough revenue to service their debt as well. But, it's usually more complicated than that.

My only point was that this is a HUGE acquisition for CF if (and I still think it's a big IF) they are the buyer. With huge acquisitions comes huge risk, and of course, the opportunity for huge rewards (isn't that one of the Ferengi Rules of Acquisition? )

[cewldre]

here's what I have heard from a source...

The deal is supposed to go something like, starting bids, a little bit of shuffling out not so serious bidders, moree bids, announcement sometime end of June or so.

If CF bought the PP it could be a good time. Yes, I know they aren't about theming a lot, but I think they would run with it at those parks, since it's established. I doubt they'd rip out all the theming, well, yet. They could have 2 different stlye parks, family and thrill. Could be a great adventure for them.

[flightoffear1996]

Here is my thing though. Six Flags just had poor mangment. They have some great park such as Great Adventure and Magic Moutain but since they have alot of smaller parks that lose money that is where they have thier downfall. Cedar Fair parks are all great quality. With them buying Paramount (if they did) they would be buying an all ready sussfull chain and not a chain they would have to pull out of the water.

[jzarley]

Here is my thing though.  Six Flags just had poor mangment.  They have some great park such as Great Adventure and Magic Moutain but since they have alot of smaller parks that lose money that is where they have thier downfall.  Cedar Fair parks are all great quality.  With them buying Paramount (if they did) they would be buying an all ready sussfull chain and not a chain they would have to pull out of the water.

Ok...I give up.

You're right--there would be absolutely no risk if CF were to finance $1B to acquire a company as big as themselves. (After all, these kinds of mergers are always successful...) Doubling your annual revenue completely alleviates any concerns over quadrupling your debt. While CF is at it, they should consider buying Disney and Busch as well...afterall, they are both well-managed, profitable companies, so the cost and effort of acquiring them is a meaningless detail.