Cedar Fair and Six Flags merger to complete July 1, mostly Cedar Fair executives to lead new company
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From the press release on closing:
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.”
From the leadership press release:
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.
I went way too long speculating about what might happen with the combined company down the road. To repeat, speculation! I don't know anything! But this is the way I would think about it if I were CEO, which I'm obviously not going to be anytime soon. Apologies for the length.
Not Going Anywhere
- Canada's Wonderland
- Carowinds
- Cedar Point
- Kings Dominion
- Kings Island
- Knott's Berry Farm
- Six Flags Fiesta Texas
- Six Flags Great America
- Six Flags New England
- Six Flags Over Georgia
- Six Flags Over Texas
- Six Flags St. Louis
These are the core of the company, the big parks near large metro areas. (There’s an obvious one missing from this list.)
Going Going Gone
- California’s Great America
- Six Flags America
All things being equal, if you were going to keep one park in the Bay Area, it would probably be CGA. But obviously they’ve made a decision on that. I suppose they could lease back the land as long as they wanted, for the right price, but I wouldn’t expect that.
For SFA, my sense is it’s not a great park, and in the new chain it’s cannibalizing business from Great Adventure, Dorney, and Kings Dominion. And the real estate is probably valuable (more than, say, Michigan’s Adventure). Stick a fork in it.
Probably Not Going Anywhere
- Six Flags Discovery Kingdom
- Six Flags Magic Mountain
I don’t think they’ll jettison Magic Mountain. But if they ran into issues with their debt or some other calamity happened, I’m guessing the land it sits on is more valuable than any other real estate in the company. It’s probably worth more with houses than with an amusement park.
The old Cedar Fair was getting rid of their animal attractions, and I don’t know how much that’s part of DK’s appeal. Maybe if they ditch the animals there’s an opportunity to upgrade the rides with some from CGA? I wouldn't see them abandoning the Bay Area altogether.
What Business Are We In? Part 1
- Dorney Park & Wildwater Kingdom
- Frontier City
- Michigan's Adventure
- Six Flags Great Escape and Hurricane Harbor
- Valleyfair
- Worlds of Fun
A bunch of parks that may be reasonably profitable, but there are two big questions to me:
1) Are they a drag on the overall chain? If the other parks are generating 20% ROI, and these guys are at 10%, then I could imagine a sale to someone who would be happy with 10%.
2) Maybe Zimmerman and Co. want to run a chain with 40 parks of various sizes, or maybe they want to concentrate on mega parks and let other folks be in the local park business. I would argue they have too many parks to manage them all successfully, and the smaller ones are distractions. But you also might say they’re cash cows and don’t require a lot of investment.
(Not to go all Timber-Rider on you, but I would be investing in Michigan’s Adventure … just not in the park itself. It’s a resort area where the Hampton Inn is asking $300 a night next weekend. Drop a hotel or two next to the park, and maybe a campground, and let it drive business at the amusement park.)
(Also: The organization of Cedar Fair into regional divisions never made sense to me. You have parks that are also vacation destinations, giant parks, medium parks, and waterparks. Why not organize along lines of business? But what do I know?)
What Business Are We In? Part 2
- Schlitterbahn Galveston
- Schlitterbahn New Braunfels
- Six Flags Hurricane Harbor Concord
- Six Flags Hurricane Harbor Phoenix
- Six Flags Hurricane Harbor SplashTown
- Six Flags White Water
- Six Flags Hurricane Harbor Oklahoma City
- Six Flags Hurricane Harbor Rockford
The Schlitterbahn parks are probably staying, because they were one of Zimmerman’s deals, but also because they have resort hotels making them more profitable (see my MIA comment above). As for the others, Cedar Fair got out of the standalone waterpark business a few years ago. Do they want back in?
How Do We Feel About Mexico?
- Six Flags Mexico
- Six Flags Hurricane Harbor Oaxtepec
No reason to think Six Flags Mexico isn’t as profitable as any other park on this list, but it’s a whole set of compliance and currency and other complications that maybe you’d just as soon not have to deal with. And Hurricane Harbor Oaxtepec is a standalone waterpark about 50 miles away.
How Do We Feel About Being a Non-Owner Operator?
- La Ronde
- Six Flags Darien Lake
Six Flags manages Darien Lake on behalf of the park owner. There’s no reason to think that doesn’t work out well for them, but I assume it limits both limits their profits and what they could get out of a sale (basically some used rides and whatever the contract is worth). They could, however, decide to let someone else run the place.
They also manage La Ronde for the city of Montreal on a very long contract. Again, they can’t just sell. But they could probably get someone else to take over the lease, as long as Montreal agreed. With Canada’s Wonderland not going anywhere, I assume the international nature of the park is not an issue.
How Do We Feel About Saudi Arabia?
- Six Flags Qiddiya
I have no idea what the arrangements are here. Is it just a licensing of the name, and maybe some design and ops consulting? If so, take the money and run. (And brag that you have the world’s tallest coaster.)
They've said before that Michigan's Adventure is the most profitable in the chain. Big margins. There's no reason to shed anything unless it's a) consistently not profitable or b) a net land sale is worth more than x years of profit from the park sitting on it.
Jeff - Editor - CoasterBuzz.com - My Blog
I still don’t see any upside in selling off high profit/low investment parks. You pay off maybe 5% of the debt they owe and give up the cash flow. Someone tell me I’m wrong.
It's mostly a math problem - if those parks are more profitable, then by all means keep them. But it is possible for them to be somewhat profitable but non-strategic for other reasons.
bigboy:
I still don’t see any upside in selling off high profit/low investment parks. You pay off maybe 5% of the debt they owe and give up the cash flow. Someone tell me I’m wrong.
Depends on how long the CEO and company stay onboard. Short term gains for long term losses are a big thing in companies.
Did MIA ever get the water/sewer line situation agreed upon?
With climate change creating unbearable heat in Texas, California, etc. there’s no way I’d go to those parks to stand in ride lines during the summer. While MIA is a bit further north of Holland, Saugatuk, Grand Rapids, etc. that area has a strong tourism base. I could easily see MIA growing if given the appropriate marketing/advertising and capital investments. RMC single rail, Premier Sky Rocket, Zamperla flats, etc. would be great additions for that park .
I actually mostly disagree with investing in the park itself, other than maybe the waterpark. I think it's generally hard to get tourists away from the beach. I'm a coaster nerd posting on a coaster website, who vacations for a week every year in southwestern Michigan, and I've never been to Michigan's Adventure. Because the beach!
(There's a video somewhere about Hard Rock Park where one of the original developers makes this point. Although it was mostly 2008 that did them in.)
BUT, if you can get people staying next door to your park, then you can get some synergy going.
I don't know about the water/sewer question. That's a good point.
Gunkey Monkey:
Did MIA ever get the water/sewer line
I think that's rumored to be the new-for-2025 attraction.
hambone:
It’s a resort area where the Hampton Inn is asking $300 a night next weekend. Drop a hotel or two next to the park, and maybe a campground, and let it drive business at the amusement park
One possible sticking point: it is a highly seasonal destination, and the season is VERY short. Climate change aside, "summer" in Michigan is really late June or even July through the first week-ish of September. Those May dates can be pretty miserable, and even June is hit and miss.
I think a campground is probably a better bet than a hotel, because it is much less capital-intensive.
Vater:
Gunkey Monkey:
Did MIA ever get the water/sewer line
I think that's rumored to be the new-for-2025 attraction.
I hear they are relocating all of the old water/sewage lines replaced after the Magnum bathroom renovations to Michigan's Adventure.
Gunkey Monkey:
Did MIA ever get the water/sewer line situation agreed upon?
Not until Dorney is done with theirs.
Nothing to see here. Move along.
None of the CF parks will be up for sale they are all in pretty good condition, and as said MA is the most profitable. The SF parks that need alot of work, possibly, I think the combined company can def get better cap ex budgets then both companies before, and I hope the SF construction delays are a thing of the past. Also I think the merger will help park managers not be so under the thumb of Charlotte as the number of properties is now really, really quite large. Im also curious to see if we get more ride swaps.
It seems like capital allocation to the SF parks has a lot to do with their overall success. Fiesta Texas has been on a tear of new stuff, and consistently seems to get among the best reviews (not surprising, given the GM).
Jeff - Editor - CoasterBuzz.com - My Blog
Jeff:
It seems like capital allocation to the SF parks has a lot to do with their overall success. Fiesta Texas has been on a tear of new stuff, and consistently seems to get among the best reviews (not surprising, given the GM).
Yea. It’s a fairly well run park by six flags standards. Gets a little over crowded at times. Not surprising since they practically give away the gate with passes at every price point and option. Combined with San Antonio population explosion over the past 20-30 years.
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