Kinzel says he wants to get back to running parks, not worrying about finances

Carrie M. said:
Because there is no evidence of two very important factors: 1) The company cannot go on unless it is sold and 2) That anything other than the poor market has caused the financial risk you mention.

These claims of total financial failure weren't being made prior to this offer from Apollo. And if this offer was merely an unsolicited opportunity presented that management deemed worthy of consideration as an easy way out, then it doesn't mean the company is in dire straits.

If you or anyone else believes that the company has failed financially and the company must be sold as a result, how could you possibly vote no to this offer? Shouldn't you be trying to salvage whatever you can out of the sinking ship?

Companies like Apollo don't randomly approach healthy, growing businesses and try to buy them out. Frankly, it's not worth their time and effort to try, and the potential return for them vs. payout isn't there either. So the idea that they would even make an offer sounds an alarm. Yet, reading quarterly reports, press releases, etc., indicated that while things weren't perfect, there certainly was no reason for panic.

Why am I not concerned about salvaging what I can? Well, first of all, while I'd lose a few grand selling the units at $11.50, CF is still only around 8% of my portfolio. Secondly, I'm in spite mode. I figure why should the unitholders lose while everyone else involved in the deal makes out like bandits.

I completely respect that, Bear. The terms of the deal suck and holding out for something you can support and/or are more favorable for you makes total sense.

So the idea that they would even make an offer sounds an alarm. Yet, reading quarterly reports, press releases, etc., indicated that while things weren't perfect, there certainly was no reason for panic.

Again, that's my point. The tangible evidence we have still indicates the parks have been at the very least "holding up" operationally. Unless we are now suggesting CF falsified their financial statements, they seem to me to suggest the problems don't have to do as much with operations, but rather began to surface at the same time the economy started to nose dive.

Whose to say if Apollo hadn't come along or if the sale is declined that CF won't continue to hold their own however rough the road might be?

That's a pretty huge gamble, even if the optimist in me would like to think otherwise. It still comes down to whether or not they could refinance long-term debt in 2012. If not, we'd have Six Flags Part II.

If you like the parks, and want to see them thrive, the best thing you can do is vote for the Apollo deal. A company with lots of cash and impecable credit was basically ruined by the Paramount deal and I think refinancing the debt is a very big if given the state of the company and economic conditions. Given that the economic climate will still be difficult in 2010 and their inablility to pay off much debt, I think the stage is set for Six Flags Part II if the Apollo deal fails. At least $11.50 per share is better than where I think the stock will be heading if the company is not sold to Apollo.

It is not an issue of if the parks are profitable, they are, especially Cedar Point. Because the debt is so massive, there is just not enough money in the pot to pay down the debt in meaningful way and avoid tripping loan convenants. Because of this, will they be able to refinance at a reasonable interest rate, or at all? I think it looks very grim.

If the units keep going up in price, perhaps I'll just sell before we get there!

It is trading at $12.25 as I type this...nearly $1 above the Apollo offer.

Why?

^My guess is that the price increase is in response to "an anticipated better offer" from Apollo...

The rising price gives me the itch to sell. The weird thing is that if it does get high enough, I wonder if legions of small individual investors will be likely to vote for the Apollo deal.

Seems to me to be a cross between Deal or No Deal and liars poker at this point. At some point, CF will send out the info for the unitholder vote which will contain either a higher price agreed to by Apollo or some other buyer or the original $11.50/unit price. If its the latter, unless more than 1/3rd of the folks vote no, you made a bad deal either not selling for more than $11.50 or buying currently for more than $11.50. The shop around period ends next week I believe so we shall see.

You know, if Kinzel REALLY wants to be back to running the parks, have him work operations for a summer or three. :) Let's see how long he lasts before having a heart attack!