Cedar Fair investor takes issue with non-vote for unitholders on Six Flags merger

This seems a little squirrely:

This was achieved, according to Neuberger, by having Six Flags pay out a $85 million special dividend that shrunk its size and allowed Cedar Fair to be deemed the acquirer in the transaction. Had it been deemed the acquisition target, change-of-control provisions in Cedar Fair's bylaws would have required it to hold a shareholder vote on the deal.

Neuberger Berman also said the breakup fee structure discourages Cedar Fair from exploring offers from other parties.

Its the nature of drawing lines. Two transactions that are very similar may fall on different sides of the line. And because they do, they will be treated very differently. If Cedar Fair unitholders own 51.2% of post-merger entity and no unitholder approval is required. CF unitholders own 50.9% of post-merger entity and unitholder approval is required. How different are those transactions? Approval process is very different though.

And yes, deals are structured with regulatory, governance, taxation, etc. issues in mind. Investment bankers, attorneys, accountants, consultants, etc. make livings doing that every day. Don't find that surprising. Its within the rules set forth in the partnership agreement.

Breakup fees tend to discourage the party paying from exploring other offers. Its how it gets its name. But here its not like there are a ton of other options out there. And presumably Cedar Fair has at one point or another talked with anyone who would be a possible acquisition/merger target (or was refused such a discussion).

CF always prided itself on being a partnership, and its tax and payout structure.

To me, that is where the strongest revolt will come from, but those were the main holders circa 2006, not 2023.

I wonder how many shares are held by Kinzel, and the old CF guard in retirement or have they divested themselves of it all?

Not sure how many investors care about it being a partnership with pass through tax treatment. How many investors in CF don't have other investments in non-pass through entities?

When I did own units, it was a pain in the ass because I had to wait until they issued their K-1 before I could file taxes.

Which makes this in the linked article odd:

It added that Cedar Fair shareholders who enjoyed tax benefits because the company was structured as a partnership will lose out because the combined entity will be taxed as a corporation.

The only shot of this not going through was an unforeseen regulatory or antirust issue (highly unlikely) or SIX institutional investors voting it down. Their 3rd largest investor, who was publicly against the deal, has shedded over half of their shares within the past week. So that won't happen.

Barring anything truly unforeseen, this will happen.

I'd be more optimistic if this were SEAS and FUN combining as those parks have more commonality in strategy, quality, culture than FUN and SIX do. Add into that the merged company is being led by Tim Fisher and Selim Bassoul - the future is not bright for these parks or the quality of guest experience they'll be delivering.

Coming in 2026:

They probably still have some Six Flags Ohio stuff laying around. Just use that and save some money.

I'll contribute the banner I have in my shop.

Jealous! That is awesome.

Has it been decided if we are sticking with Sucks Flags post merger? Anything better for this nightmare?

Nice banner. Now put a knockout seal in that box!

All in due time. I just bought the shop and still in the process of building it out and moving in. But good eye!