Six Flags makes an offer to purchase Cedar Fair?

Shades said:
I don’t think that I will ever understand how a ride name has any relevance at all as to how good the ride is or how I view a park.

I think it has to do with theming. Theming is minimal with SIX and FUN but it is still there and at least adds a little bit for at least most people.

Can you honestly say you would enjoy Steel Vengeance as much if it was named Steaming Bag of Donkey Turds?

Just Coasting said:
Why would you bring God and Jesus into this.

You just ridiculed someone's religion and I take great offense to that.

Dude, as a Christian myself, you're reaching for a reason to be offended. Chill. It was a joke.

Zoug68 said:
Maybe THIS is the 150th Anniversary announcement....LOL!

I don't always agree with you (although I do enjoy your trip reports on CBuzz), but this made me laugh my arse off.

Sorry for the double post, but one other thing. Corporate boards are obligated to represent the interests shareholders (or in CF cas unit holders). So forget your emotions, CP history, etc. If the CF board decides this is to their benefit, even if it is only short term, they might do it.

http://www.sanduskyregister.com/story/201910020020

“ Hall, a spokesman for Cedar Fair told the Register the company cannot comment at this time.”

I smell smoke...

Cargo Shorts said:

Can you honestly say you would enjoy Steel Vengeance as much if it was named Steaming Bag of Donkey Turds?

I sure can. When you are enjoying the coaster do you honestly think of the name of it?

Tilt-a-Whirl said:
http://www.sanduskyregister.com/story/201910020020

“ Hall, a spokesman for Cedar Fair told the Register the company cannot comment at this time.”

I smell smoke...

I smell a spokesman being careful not to misrepresent his company. There are corporate governance issues at play which compel the companies not to talk about things which have not been discussed among appropriate internal parties.
That said, unless something has changed drastically in the past decade, I am fairly confident that this rumored sale is Knott going to happen.

—Dave Althoff, Jr.

Shades, I actually do but that’s just me I guess. I wonder why SIX feels it necessary to pay DC for all that licensing then. Sure could add to the bottom line if they just went with Coaster #1, Coaster #2 etc.

Happy 150th!!

Th-th-th-th-th-That’s All Folks!!

I am all for it. Cedar Fair has limited its appeal so much for non-coaster fans, I would love to see this. Six Flags turned Geauga Lake into the world's biggest park. Cedar Fair ruined it. I'd love to see new owners with a more inclusive, less sanctimonious, less greed-based culture. The current suits need to realize that they are not the only people who have an idea about how to run a theme park.

I posted a long comment on Facebook so here are some of my thoughts. Most of them along financial lines in that I can see why Cedar Fair's board and unitholders have to consider the offer seriously, but sort of cutting to how I think it could play out for me and maybe others at the end. Long story short, I get that it's business, but man I hope this doesn't happen.

The last time was the topic of Cedar Fair being sold came up, there was a dude (Kinzel) losing his marbles, panicking, and probably worried the company was going to go under in bad economic times so he tried to cash out at a really low price ($11.50 per unit or so if I remember). The unitholders revolted because they felt that was not a good deal for them and the company would likely rebound if they could survive a year or two of struggles. If Apollo bought the company back then, they'd be looking to sell it again by now or before at a huge profit because that's what private equity companies usually do. Pump and dump. That would have been an absolute steal for Apollo at the time. The unitholders were right to reject that deal because right now, they have 9 years of dividends and have a share price of close to $60. So if they sold now, they'd be selling at peak value (or darn close to it). The stock price is high, revenues have been up and up for eight or nine years in a row, their books are probably looking really strong because they pumped them up with cheap gold pass sales, etc. It's unlikely to get much better than this as a seller at least in the short term. That unit price is likely to fall with the rest of the market over the next few years.

I don't think Six Flags can get the financing to buy Cedar Fair outright since I think we'd be talking in the neighborhood of 5.5-6 billion dollars (some premium over market cap plus debt) so there would probably be cash and also stock in the new combined company involved. I'm sure the amount of each is what would be being hashed out - assuming this isn't fake news.

Having said that, I'm not so sure I'd want to hold the combined Cedar Flags stock going forward. They would gain pricing power on tickets and passes because there will be much less regional competition and they'll be offering more parks on the same pass, but I don't think it's realistic to think they could double prices and keep the same number of customers. I also think there is some overlap in the customer bases right now so there would be some cannibalization although probably not that much since the it's mainly coaster enthusiasts that have both passes and visit both chains. Even so, I am still skeptical that the company that would be twice as big, with twice as much debt, etc can make the same revenues as the two companies can separately. Sure there might be some cost savings with economies of scale, reducing overlapping corporate positions, but I don't think there's much there given how lean Cedar Fair is and I doubt Six Flags is all that different these days. There's also some market and geographical diversification to be had, but both companies are already pretty well spread around North America. I think the biggest thing that would happen is they'd likely end up cutting back on investments back into the parks due to eliminating competition. For that reason, I feel like this deal could ultimately strike a blow into how some of us feel about dropping so much money year after year going to parks. It's been a fun ride getting a fancy new coaster every couple years, but if things get stagnant and Cedar Point and Kings Island end up being milked like Michigan's Adventure has been for the last decade, would people cut back on their trips? I might. I think others might too.

I really hope the deal doesn't happen.

Hitler isn't happy about this either

God, who would be?

I saw some comments how they think Cedar Fair may be looking into selling a *couple* parks to Six Flags, and it has been blown out of proportion to include the whole chain.

On a real note, what advantage would Cedar Fair have to do doing the deal?

Basically, a pile of money.

Big ole pile of money, sucker unit holders into stock payment of Six before its fourth bankruptcy from over leveraging, restructure new SIX with the remnants and profitable parks, laugh all the way to the bank?

Keep in mind;
SIX CEO salary is about double CF CEO, so there’s the fact that SIX needs a new CEO in February when theirs retires... “merge” the two install Zimmerman. Works with the timing as SIX wont have to ‘search’ for a new CEO, the SIX chain gets high value profitable parks, CF already started SIXing their parks with gold pass under a CEO that is a Paramount holdover, and not a CF alum, that couldn’t be bothered to move to Sandusky.
https://www1.salary.com/SIX-FLAGS-ENTERTAINMENT-CORP-Executive-Salaries.html
https://www1.salary.com/CEDAR-FAIR-LP-Executive-Salaries.html

But as long as food services gets a much needed SIXing and Bathroom maintenance....
Nah! I still thinks it’s bad news.
(Remember the Paramount movie Tommy
Boy, ‘there’s nothing to do in Sandusky Ohio’)

cptedsdisciple2 said:
Six Flags turned Geauga Lake into the world's biggest park. Cedar Fair ruined it.

The worlds biggest park, some forty square miles, is in Orlando Florida.
Cedar Fair closed Geauga’s doors forever so there’s that, but “ruining” it? nope. Ruined happened long before 2006.

im just going to say this about this situation: if Six flags is going to try and buy up cedar fairs parks (there biggest competitors what happens when six flags goes bankrupt again what going to happen to some of these parks. And just like me anything six flag's touches they ruin and how does all there other parks look o ya like complete crap. This is going to suck

Tilt-a-Whirl said:
Many are now claiming “merger” which would lead to a totally different discussion. Their CEO is about to retire, so merging the chains and maintaining headquarters in Sandusky with Zimmerman and team in charge and Texas as a satellite corporate office with a mix of Six Flags talent is what I would hope for- but again- not really liking any of this discussion.

There is literally no such thing as a merger, that is just Wall Street Speak for a purchase. Cedar Fair would be dissolved and all assets put under Six Flags control. Well, not REALLY Six Flags, there is obviously a third entity that would be financing the whole thing that would end up owning the entire bag of marbles.

I smell a spokesman being careful not to misrepresent his company. There are corporate governance issues at play which compel the companies not to talk about things which have not been discussed among appropriate internal parties.

—Dave Althoff, Jr.

True. But if there was nothing to this it would've been squashed by now. Just sayin'.

Tilt-a-Whirl said:

XS NightClub said:

You do realize that Zimmerman operates out of the Carowinds offices, the former HQ for Paramount Parks.

Your point?

What difference does it make where the CEO’s office is? The headquarters are Sandusky.

Actually, A headquarters is at Cedar Point. Not THE Headquarters, as it was always made to sound. If the CEO isn’t there, it isn’t THE Headquarters. And yes, it makes a difference.