Posted Thursday, December 23, 2010 1:48 PM | Contributed by Jeff
[Ed. note: The following is an excerpt of a press release. -J]
The Board of Directors of Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced the findings of the proxy advisory paper prepared by Glass Lewis & Co., a leading independent governance and proxy voting firm, regarding the proposals submitted by Q Funding III, L.P. and Q4 Funding, L.P. (“Q Investments”) to be considered at a Special Meeting of Unitholders on January 11, 2011.
Glass Lewis has recommended that unitholders vote against Proposal #2 “using the Company’s WHITE proxy card” as it found Q Investments’ rationale for this proposal “relatively unconvincing” and concluded “… we fail to see how implementing a rigid cash allocation policy of ‘distributions before debt,’ coupled with a vague mandate to increase dividends to close to historical distributions levels based on earnings, will afford Cedar Fair any measure of improved stability.” Glass Lewis also stated in its conclusion, “…we note the current board includes two new directors designated by the Dissident, each of whom recommend that unitholders reject this proposal.”
Commenting on Glass Lewis’ recommendation to vote against Proposal #2, Michael D. Kwiatkowski, Cedar Fair’s lead independent director said, “We appreciate Glass Lewis’ recognition of our commitment to providing our unitholders with a strong and sustainable distribution. In order to do so, we believe it is critical that we adhere to a prudent fiscal policy that responsibly maintains an appropriate balance between growing distributions and a strong balance sheet – as well as an investment policy – that provides maximum long-term returns.”
As expected, Glass Lewis followed its long-standing policy of supporting the separation of the roles of corporate officers and the Chairman of the Board by recommending unitholders vote for Proposal #1. “While we certainly respect Glass Lewis’ staunch position on this topic, we do not believe the particular route being proposed by the hedge fund in this case is in the best interest of all unitholders, especially since it would put unnecessary restrictions on the pool of qualified succession candidates as we move forward with our ongoing succession process” said Kwiatkowski.
Kwiatowski noted that the employment contract with current chairman and chief executive officer, Dick Kinzel, expires on January 2, 2012. With the assistance of the leading executive search firm Korn/Ferry International and a special committee of independent directors, the Company expects to identify a new CEO to succeed Kinzel in this role by the end of the second quarter of 2011.
Glass Lewis has recommended that unitholders follow its voting recommendation by voting the Cedar Fair WHITE proxy card and not Q Investment’s green proxy card.
Read the entire press release from Cedar Fair.
I'm voting with Glass Lewis! Or I should say, I did before I sold my units.
Another call for seperation of Kinzel as CEO and Chairman. I wonder if he sits back blindly thinking it won't pass, or if he's actually considering he'll have only one position after the vote.
Old men can be staunch in their ways - I doubt he's even considered the fact he may have to allocate office space...
I see the Stock is at $15.... So Jeff that makes you an unbiased commentator now?Last edited by Jerry, Thursday, December 23, 2010 2:43 PM
It is the way I intended to vote anyway but I feel more confident about it now. My guess is that most people on the inside would tend to agree with this recommendation.
I must say, I am getting a little "sick" of all the Q Funding/Cedar Fair stuff... It all just seems shady to me, from both sides. I don't really follow it all that close, but from what I do read it just seems unprofessional for both parties.
I just wish they would do what they need to behind closed doors and let everybody know the outcome when its all done.
That justs me though :D
This is just what goes on with public companies, particularly when there's a big outside shareholder. How Cedar Fair managed to avoid it this long is beyond me.
There is a lot of public info with respect to public companies. And they typically have more formal processes for much of what they do. But I think the middle school catfight that is being conducted right now with Q Funding and CF is somewhat unique when looking at public companies.
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