Bids for Six Flags parks come in below expectations

I dunno... aside from Magic Mountain and maybe Elitch Gardens, are all those properties worth $800 million? I'm sure that's what Six Flags NEEDS, but is that what they're going to get? I need $30K for a new car but I know my current car isn't worth $30K.

The thought of Herschend Family Entertainment buying these properties is appealing. I don’t know if they could turn Magic Mountain around (that park seems hopeless), but I think they would be great partners with Darien Lake, Elitch Gardens, and such. For those who aren’t up on who HFEC is, they own interest in Dollywood, Silver Dollar City, Dixie Stampede, and Ride the Ducks. They seem to be an upcoming key player in the theme park industry, and might be able to turn these parks into the family friendly attractions that SFI could only dream of.

I can see the majority of the parks fitting into the Herschend family of parks but SFMM isn't one of them. I think a company more adept at dealing with large parks (like Busch) would be a better fit for that one.

Look at Geauga Lake. Cedar Fair is still having problems getting people to recognize that it's not a Six Flags park. How would someone do it with Magic Mountain?

I think Six Flags need to keep operating those parks to get the revenue from them. They could turn it around, but its going to take a lot of effort on their part. More then what they had done this season. The parks I have visited(America, and Great Adventure)seemed to be just about the same as they have always been except the staff we a little more friendly.

They need to recognize just how valuable it is too have effecient ride operations, and making sure their coasters do operate. Nothing like walking to the entrance of the park to see El Toro on the list of rides closed. Frustrating! When are they going to get a clue?

The solution is obvious, add more parks to the sell list. SFGADV added to the other 6 would easily clear the 800 million requirement. Still, I'm mixed about them turning down the 650. If it means years of poor operations as they squeeze every last dollar out of the shrinking fan base, I would much rather see a new operator turn those 6 parks around. And as they continue to run some of their parks into the ground, they become less and less valuable as time moves on.

At this point, imo they should roll the dice and start building hotels at some of their parks. They clearly need another source of revenue coming into the company.

Six Flags is crazy if they think they are going to get nearly 1 billion for those parks. I agree DBJ, they'd need to offer a whole lot more for that price. SFGadv or one of the Texas parks.

But offering Great Adventure would be considered "a whole lot more". Not that I know much about this sort of thing, but I'd bet that park alone could fetch around $300 million. Adding it to the deal to make another $150 million doesn't seem to make much sense.

What about Frontier City? I didn't see it on the list. Have there been any bidders? As far as theming goes, FC is the one that would truly be the best fit for HFES.

Frontier City is officially for sale. The other parks aren't officially for sale, Six Flags is "trying to gauge interest".

Why does everybody keep stating to sell gadv.

yes this park needs work but it has a whole lot more potential then any of the other aprks.

GADV is the one park they should not sell. Its like cedar fair selling cedar point.

IF GADV is sold there is no point in keeping the six flags chain and name.

Well you still have the original 3 SF parks which started it all and probably should've stopped right there as well. SFGAdv is not the be all end all of SF parks. After all, the chain had been around for 17 years before it even acquired GAdv.

"But offering Great Adventure would be considered "a whole lot more". Not that I know much about this sort of thing, but I'd bet that park alone could fetch around $300 million. Adding it to the deal to make another $150 million doesn't seem to make much sense".

Exactly. Which is why no company is going to be stupid enough to pay nearly a billion dollars for a few "hand me down" parks and one very big, troubled one. wtf are they thinking?

Which explains the $650 million figure. They know they are a bunch of ahnd-me-down parks and they probably tossed a figure out there to see if Six Flags bites. For that price, all those parks sounds like a good deal.

Just wanted to point out that SF never said they expected 800 million for the parks. Third party analysts have said that. In fact, none of the parties mentioned (both SF and the buyers) were reached for the article.

So while the headline says the bids fell below expectations, they mean that the bids may have fallen below investors expectations based on what some market analysts told them. :)

Just clearing the issue.

Six Flags is crazy is they think that 650 million is not enough. Elitch Gardens, and Darien Lake don't look like great steals. Big deal, they have Superman at one of them. Neither does Wild Waves. Magic Mountain looks like the only GREAT park out of these. The other two parks are water parks for goodness sake. Selling SFGAdv is as bad as selling SFMM. The company is already trying to sell the park that everyone in the US knows about. How many people know about SFKK, SFStL, SFEG, SFMW, and so on?

Fix the park up, and everything will be better. It still makes a lot of attendance every year. The season passes are too low there, and rides not operating is because of spending too much money on roller coasters every year like Tatsu. Forget the roller coaster spending, and it will be very, very easy to bring that park up to GREAT shape.

Thanks for clearing that up. Now that I've been thinking about all this, I can't ever remember any figures being tossed about. I wonder if that price is what the market feels those properties are worth, or what it feels Six Flags needs for those properties to make a sale worth their while?

I believe it's what they feel six flags needs, Rob.

From the article:

"Six Flags, the second-largest U.S. theme-park operator with 30 properties, may need $800 million to sufficiently lower debt ratios, according to analysts including Merrill Lynch & Co.'s John Maxwell."

Which brings me back to my original thought. $650 million sounds like a fairly good offer for what they're selling. I'm certainly no finantial expert, but I expected that they parks would go for somewhere between $500-600 million from the beginning, especially if kept as theme parks in this uncertain time.

The fact that we're beginning to see figures thrown out, even un-confirmed ones, probably means a sale isn't far off.*** This post was edited by DWeaver 11/10/2006 1:22:10 PM ***

I believe in the recent conference call it was mentioned that they hope to announce the possible sale of the parks by the end of the year,