Cedar Fair to unit holders: Pay no attention to Q Investments

Posted Tuesday, January 4, 2011 6:25 PM | Contributed by Jeff

Cedar Fair published another letter to unit holders, asking them not to vote for the proposals by Q Investments and its leader, Geoffrey Raynor. The letter counters some of the points the hedge fund has used to make its case for the proposals that separate the CEO and chair roles, as well as demand a higher distribution.

Read the entire letter from Cedar Fair.

Tuesday, January 4, 2011 6:30 PM

Imaginary quote:

FACT: We won't dispute the Falfas situation, because one of us has already lied about that.

The thing is, so much of this nonsense could have been avoided if they were more transparent about how things have been going for the last three or four years. So Paramount Parks weren't as inefficient as you thought. Admit it. Buying GL was a catastrophic mistake. Admit it.

Still good with how I voted... separate the executive from the board, but leave the distribution alone.

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Tuesday, January 4, 2011 6:59 PM

What I said when the PP acquisition happened - CF parks have/had great rides, and Paramount Parks had fabulous marketing/theming, impeccable landscaping, and a true understanding that *this* is first and foremost a "hospitality" business. I miss Paramount parks...

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Tuesday, January 4, 2011 7:10 PM

I won't go as far to say that I'm 'unhappy' that CF has the Paramount parks. There was maybe one other company that I would have liked, but I'm not sure how interested Herschend really was. The poor decisions afterwards were that Dick didn't learn anything from a company that had made some advances and were doing things right, and instead imposed his own antiquated ways on the parks, when there could have been a merging of 2 companies that had certain things on each end figured out.

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Tuesday, January 4, 2011 7:20 PM

"Move along....Nothing to see here.... Move along."....

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Tuesday, January 4, 2011 7:45 PM

Tekwardo said:
I won't go as far to say that I'm 'unhappy' that CF has the Paramount parks.

Me neither...just could be happier about "how" CF has the Paramount properties...

there could have been a merging of 2 companies that had certain things on each end figured out.

Exactly. Keep the great rides and all, but really embrace the concept of hospitality. The landscaping and such (Paramount Story, for instance), and the theming....those have ben missed. The IP integration under CF has been....chaotic?

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Tuesday, January 4, 2011 8:23 PM

The other problem is, the company is so focused on the distribution and paying down debt that the operation of the parks suffers.

It appears that Q is being a bit sloppy in their priorities. They have good intentions, and I think there's a hint of "lets improve the parks by ditching Dick," but their execution is juvenile.

In the end, it's a shame that all this boils down to is making money.

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Tuesday, January 4, 2011 9:01 PM

Guide_Wheel said:
It appears that Q is being a bit sloppy in their priorities.

I disagree--Q is very focused in their priorities: They want a return on their investment and they want it NOW. Everything else is secondary.

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Tuesday, January 4, 2011 10:32 PM

Let me put it this way: if they were THAT focused on their priorities, that one guy (his name escapes me right now) would have personally joined the board to "infiltrate," rather than have two outsiders put in.

It's as if they were serious at the start, but then got timid once it was time to step up. And they're using ridiculous letters and grammar to prove their point - not good.

Any way you slice it, the whole thing is a mess.

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Wednesday, January 5, 2011 1:19 AM

Mergers/acquisitions typically provide an opportunity to combine the best of each entity. Too often its the case though that that does not happen.

The middle school cat fight continues. I would hope that at some point, one side or the other would just let it rest and wait for the meeting. The other side would either remain quiet itself or start having an argument with itself. But middle school cat fights typically don't work out that way.

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Wednesday, January 5, 2011 1:41 AM

Unitholders have sought the changes which have resulted in recent gains by the company. Still Cedar Fair management continues to fight change and it's owners.

But change is long over due. One only has to read about the "F" grade Cedar Fair got at the New York Times DealBook column for management behavior:

http://dealbook.nytimes.com/2010/12/28/the-deal-makers-who-deserve-...ng-grades/

Today the Times gives unitholders an "A" for having resisted the abusive low ball proposed sale of the company:

http://dealbook.nytimes.com/2011/01/04/deal-makers-at-the-head-of-t...s-in-2010/

Fat chance unitholders shall "pay no attention" to Q Investments as Cedar Fair wishes.

Cedar Fair needs a new direction, and new directors. Unitholders must enact policies to assure fresh new leadership is brought on board.

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Wednesday, January 5, 2011 1:42 AM

Jeff, did you sell all or some of your stock?

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Wednesday, January 5, 2011 1:59 AM

Yeah, I unloaded it. I needed the money, and the tax deduction on the loss.

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Wednesday, January 5, 2011 8:06 AM

Until the Board collectively (not just Kinzel) addresses the Falfas separation and the Kinzel GM at Carowinds then anything they have to say, in my opinion, is suspect.

Nobody can look me in the eye and, with a straight face, tell me that Bart would be a GM in the company if anyone other than Dick were the CEO. And, frankly, it is an ugly slap in the face to many more qualified people in the company to suggest otherwise.

And, not addressing the outright lies about Falfas just fuels my distrust.

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Wednesday, January 5, 2011 8:25 AM

"Falfasgate" is only the tip of the iceberg...

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Wednesday, January 5, 2011 7:34 PM

And yet everyone ASSUMES that new management would be an improvement--or even as good as current management. There is, of course, NO evidence to support either claim. Maybe Q would bring in better management, maybe worse.

Current management, for all of its faults, is paying bills and investing in its parks for the future. Can anyone say that Q would not have taken the $80m in capex and paid it out (to themselves, among others) as dividends? We have no idea if new management would be better or worse.

Remember, Michigan fans hated Lloyd Carr--until Rich Rod. :)

Last edited by Captain Hawkeye, Wednesday, January 5, 2011 7:34 PM
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Wednesday, January 5, 2011 7:56 PM

Captain Hawkeye said:
And yet everyone ASSUMES that new management would be an improvement--or even as good as current management. There is, of course, NO evidence to support either claim. Maybe Q would bring in better management, maybe worse.

We have no idea if new management would be better or worse.

So the lesson here is to stay put? That good enough is good enough? The unknown is spooky and the chance of doing better isn't worth the chance of doing worse?

Ugh. I won't subscribe to that in any scenario.

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Wednesday, January 5, 2011 8:28 PM

The unknown is spooky and the chance of doing better isn't worth the chance of doing worse?

Speaking of coach Fraudriguez...

By the way, is it raining outside, or is Rich just crying again?

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Wednesday, January 5, 2011 8:55 PM

^^ No. The lesson is to avoid change just for the sake of change. If, say, the managers of King's Entertainment/Paramount Parks came forward to run CF that would be one thing. When an investment company with no experience running, and no apparent interest in, amusement parks comes forward, that is quite another.

Change may be necessary and change may be good, but all change is not necessarily good. You could simply be trading Kinzel's faults for a different set of faults. The dividend proposition makes me VERY leery. So far, I've seen lots of indictment of "staying put" but I have yet to see anyone argue with any kind of reasonable supporting facts that this particular "unknown" and "chance of doing better" isn't MORE likely to do worse. Q has yet to say what their views on running CF are. What level of capex do they favor over the long term? What skills do they think a chairman (or the next CEO, for that matter) should have? Do they even think that experience running amusement parks is a requirement for at least one of those positions. The only thing that we know is that they want to divert debt repayment $$$ to dividends--an idea that no one seems to be enthusiastic about over the long term.

Current management has its faults but it favors paying down debt and maintaining a capex level of around $80m. Those FACTS give me more confidence than Q's Proposition II

Last edited by Captain Hawkeye, Wednesday, January 5, 2011 8:58 PM
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Wednesday, January 5, 2011 9:05 PM

Current management has its faults but it favors paying down debt and maintaining a capex level of around $80m.

It also favors nepotism, lying, and quite a few other things.

It doesn't seem to me that Q investments is the only entity that would like to see change, they're just the loudest because they have a larger interest. I may not be able to pick a good CEO myself, but that doesn't mean that I don't know when one isn't doing their job, nor does it mean I shouldn't ask for a change when one isn't doing said job.

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