Cedar Fair retains Merrill Lynch to explore asset sale

Why does this feel more like posturing than actual intent to sell?

Maybe they need a "Merrill Lynch" if, for no other reason, than to deal with the 49ers with a little credibility and backing.

They have plenty of assets they really do want to sell. Lots of real estate, for starters, especially near Cleveland.

--Dave Althoff, Jr.

Why are people STILL in denial about the fact that Cedar Fair is in deep trouble? Okay yea - let's pay Merrill a bunch of money we don't have just to posture??? Feels more like desperation than posturing to me. To sit there and do nothing would be utterly stupid in my opinion since they're relying on everything going really well this season in a terrible economy in order to just sneak in under their loan covenant next year.

I think they'd be smart to unload whatever land or whatever other non-revenue generating assets they have that they can get money for.

The trick with unloading parks is they're also going to be losing some of their revenue each year too - at least in the case of ValleyFair and WoF, probably not Great America - so you've got to chop enough off your debt to avoid throwing those EBITDA to debt ratios out of wack.

I worked for a company that did something similar, hiring the very same company, and it was largely posturing for the benefit of investors. And you know what? It bought them time, and in the end they came out OK. It's not like it never happens. It's hardly an act of desperation. In corporate America, we call that being "strategic!"

Doesnt Merrill Lynch no longer exist since it was bought out by the Bank of America? Or did BoA keep the name for this facet of the business?

Yeah, Cedar Fair is still in trouble. The other day when I was watching "Mad Money" with Jim Cramer, someone had called in and asked about the future of "FUN" (the stock symbol for Cedar Fair)..well, Cramer simply replied that "FUN" was no longer fun no more.

"The Future is purchased by the Present"

I certainly wouldn't base my opinion on what Cramer says. He actually recommended FUN back mid-summer and we all know what it's done since then. My opinion is more based on looking at what they have for debt and what they have coming in and their lack of growth prospects in the near future. They've already cut and cut to the point of hurting the guest experience and we know they don't treat their employees that great either, so there's not much left to close the gap.

Cramer got pwned by Stewart. I really enjoyed watching that.

That was possibly the greatest televised spanking ever. I almost felt bad for the guy.

Perhaps FUN has turned the corner. There is a well known law of the Universe that says do the exact opposite of whatever Cramer says.

Jon Stewart just demonstrated it to the rest of the world last week.

However, even though Cramer says no to FUN, I still wouldn't touch it.

No one on this thread has focused on the last four words of the first sentence in the lede: "...and other strategic alternatives".

That should be an ominous phrase, as exactly what other strategic alternatives could there be?

I agree, seems like a waste of money if this is merely a ploy to trick investors. I think Cedar Fair would unload Valleyfair, Worlds of Fun and Great America in a heartbeat. I wouldn't put it past them to try and unload Carowinds and Knotts Berry Farm either.

^HIGHLY doubt they'd bail on KBF. Even with the problems at the park (neighbors, landlocked, etc.) - it's THE big moneymaker for the chain in the offseason. May not be a ton of income, but it helps to have SOME money coming in when the other parks are "unemployed" over the Winter months. PGA, however, is still in the situation where CF continues to "posture" (like the wooden coaster announcement) in order to get the highest price they can. CF wants out of NorCal like crazy...they just can't afford to admit it.

RideMan said:
They have plenty of assets they really do want to sell. Lots of real estate, for starters, especially near Cleveland.

--Dave Althoff, Jr.

I believe that they still have a lot of land in Michigan that was obtained for the aborted Irish Hills developement back in the 1970's.

^^ Perhaps. I'm not familair with how much each park makes. I said that because I was under the impression Worlds of Fun makes money and that park is among those considered for sale. What's to protect any park in the chain other than Cedar Point?

Dutchman: That may be, but the specific holdings that were named are land surrounding Wildwater Kingdom (yeah, where That Place used to be) and land across the road from Canada's Wonderland.

I was looking at the Wonderland property on Google Maps and that is a very strange configuration up there; it looks like what they are trying to unload is now a *huge* cloverleaf that leads to the North end of their parking lot.

--Dave Althoff, Jr.