Well, I guess I should start looking for something to invest my money in, if my units get bought out. They say they have plans to invest $500M or even up to $800M to upgrade all the parks and hotels. Without knowing what their plans are, I'm not sure what to think yet. I suppose it could be good, if it brings the parks more up to date technologicaly and in turn makes them a more attractive place to go. But it could go the other way to, like what Six Flags did with Geauga Lake.
The article says Dick and the Gang would still be around, but will they still have the decision making power? *** Edited 7/30/2007 12:43:41 PM UTC by Jason Hammond***
There is a lot of room for investment at the parks that has nothing to do with new rides. At Cedar Point alone I could identify a TON of improvements. The Breakers Bon Air wing and Main section could use a major overhaul. Soak City is due for expansion. The Boardwalk development is long overdue. These are just a few off the top of my head. Oh, how about running fiber around the park so that the technology can catch up to the 90s?
Geauga Lake could use some major work to turn the park into what Cedar Fair's goal is. The second phase of the waterpark hasn't materialized yet.
I could go on and on. The thing that stands out to me still, though, is the impact all of this has to the typical Cedar Fair employee. Sure, Kinzel and the gang will make out well...but what about all of those folks, many of whom have spent DECADES sweating for the company they love? I hope they are taken care of in all of this.
I still think this is just Kinzel and the gang cashing in on the '00s equivalent of the dot.com boom, private equity. They see an oversupply of investors---all of these private equity firms looking to keep up with the Joneses---and are trying to take advantage of it for themselves and the unit holders.
Pretty much SOP for the folks in Sandusky. Say what you will about CF's willingness to invest in infrastructure, and their propensity to pave everything they can find, but they are shrewd.
As for that 500-800 million investment? Don't hold your breath. Watch what Cerberus does to the UAW after promising to treat all the DCX employees right, and then get back to me on those promises made by private firms. If a public company makes statements, they have some fiduciary responsibility to follow up or explain to investors who bought based on those plans why they changed. A private firm? No such constraints.
Edited to add: Now that I think about it, retaining current management may be in that class of "promise", too. *** Edited 7/30/2007 1:28:26 PM UTC by Brian Noble***
The whole situation is extremely questionable. This destiny capital company is going to pay a 20% premium AND keep current management in place? It doesn't make any sense. The timing of this (the day before Q2 earnings come out) make it look even more suspicious.
By the way, who is this anonymous source who keeps leaking info to the NY Post?
Who on EARTH makes enough to pay for it once they retire these days? Really? I mean, with vastly improved imaging techniques, much less invasive cardiac care, much improved stroke therapies and the like, people just don't die like they used to...
We may all be up the creek in a few decades!
NOTE: Severe fecal impaction may render the above words highly debatable.
Making a lot of money is one thing. Life-long benefits that go along with it? That doesn't sit too well with me, that's all. A factory worker lives paycheck to paycheck once he retires but a CEO that made a ton of money during his tenure at a company gets everything taken care of him until he passes away? I really couldn't care less about that being the way it goes, it just bothers me on a personal level. You mean to tell me Dick Kinzel doesn't have an annual salary and stock options that allow him to be set for life once he retires? I find that very hard to believe.
Don't assume that this NY Post article means a takeover is confirmed. The stock price seems to indicate that the market makers aren't expecting this deal to actually happen. A 20% premium would put the stock around $35 - its having a hard time breaking $29 today.
Edit: press release came out about a half hour ago confirms that this was all a hoax. Its not the best idea to get business news from a tabloid.
I guess that explains why the stock price was up over a dollar until about an hour ago, then it dropped 65 cents. As far as business news and tabloids, Reuters was also reporting the story. Maybe they need to change their sources too.