More suits filed to block Cedar Fair sale

Could've seen this comming from a mile away. Can Kinzel just die already?

Ouch, I am no Cedar Fair fanboy, but that was harsh! Of course Kinzel will profit from the sale, he is the leader of the corporation. Bad deals happen all the time in big business, and that is just what is playing out here. We all think of the parks as amusment parks, but rarely pause to understand to the coporate executives and majority shareholders its nothing more than business, a way to make a profit.

phoenixphan :-) said:
We all think of the parks as amusment parks, but rarely pause to understand to the coporate executives and majority shareholders its nothing more than business, a way to make a profit.

Speak for yourself. That's pretty much why I'm here. ;)

I guess I should not generalize LOL. Most of us think of parks as amusement, but not pause to think of it as a business. Some of us look at it from both angles, others, just strictly business. :-)

Well dang, in the grand scheme of things 987k is nothing compared to the payouts given to other corporate execs. But I'm not a unit holder, so I'll retreat to my pineapple under the sea.

Now I'm not a unit holder so I really don't have a lot of room to talk here, but I don't understand what everyone is upset about. Sure they may feel that the offer is less than what it should be, but it's $11.50. When I look into my crystal ball at the future of this company (running as is no sale completed) I see the debt load that they have and feel that the direction the company is headed is to a worthless stock.

That is not me commenting on the performance of the company. That is me doing simple math. Looking at the amount of total profit (if any) the company makes in a year (even a good year) it seems impossible for them to pay off the debt.

Lets take the average net income from 1998-2008 (as seen in the 2008 president letter on the Cedar Fair Investors page). In those 11 seasons the Net Income is about $72 million a year. Apply that to a debt of $1.7 billion (posted at end of 2008) and you are looking at about 24 years to pay off debt in a perfect world.

To get a more accurate picture, we should look at the company as it is run now (post Paramount purchase) so lets look at the Net Income for 2006-2008. Now the average is about $30 million. Apply that to the debt, and you are looking at paying it off in 57 years, in a perfect world.

To look further into it, we should look at the amount of debt that was actually being paid off each year. Between 1998 and 2006 the company only paid off debt 2 years. In those 2 years they averaged paying off about $7 million in debt a year. After the acquisition they were shaving off about $26 million in debt per year. Assuming that the company stays on track for eliminating $26 million a year, they will pay off their debt in 65 years.

I think it is safe to say that the company will not be buying any parks and thus should be able to continue paying off the $26 million in debt a year. What is not considered (among a billion things I am sure) is the interest that this debt will be collecting over time. Using the numbers for the post Paramount purchase, I would estimate debt, interest free could be paid off in 57-65 years (2066 -2074).

When the interest is applied, I think it becomes safe to say that this debt will not be eliminated within my lifetime (or it could just go to bankruptcy court). This is what causes me to believe that the stock will not actually go up, but will continue to go down, as it has been doing since the price peaked in 2004.

At this point if I was a shareholder I would cut my losses and take the $11.50 per share. The other option I have of course is to hope for the best and vote against the plan, and cross my fingers for the stock to go up, but I don't see those days in the future anytime soon.

Finally it seems to me that with these buyouts that if the deal proposed doesn't work, thats the end of it. I don't see Apollo making another bid should the shareholders reject the plan submitted. It seems like a one time offer that I would recommend taking.

Now that I have given my rant I would like to openly admit that I am way out of my realm here and may have no idea what I am talking about, but this is what is going on in my head and it makes sense to me. I am happy to accept clarity on my thought process.

IntaminHater said:
Now I'm not a unit holder so I really don't have a lot of room to talk here, but I don't understand what everyone is upset about. Sure they may feel that the offer is less than what it should be, but it's $11.50.

I stopped reading at this point since there's no point in going further after that opening statement.

Frankly, I'm annoyed at the suggestion that the unitholders should just step aside and let everyone else profit on the deal. Apollo is looking out for their interest, Kinzel and the Board are looking out for theirs, so why shouldn't I look out for mine?

I have every right to tell the company that I think their deal sucks and they're being taken across by undervaluing the company worth. At this point, if the units go to zero, it's not that much more of a loss to me than saying yes to $11.50. Sorry if I"m being a bit selfish and not taking one for the enthusiast crowd.

BTW, I think folks are in for a surprise if they think that Apollo is already thinking about what coasters they're going to install next.

BTW, I think folks are in for a surprise if they think that Apollo is already thinking about what coasters they're going to install next.

So what are they thinking about? What parks to close?

If Cedar Fair just waited until the economy got better, wouldn't they be profitable enough that they could be getting out of this mess?

What if they sold off a few parks? ...or a few rides from each park?

What if they raised their gate prices a little?

What if they improved their food quality, and reduced the food quantity a little, but still charged the same amount, making the guest buy more food?

This is just stuff that a non-business guy can come up with. Imaging What could they accomplish if they would start getting a little creative in solving their problems.

Jeff said:

IntaminHater said:
Now I'm not a unit holder so I really don't have a lot of room to talk here, but I don't understand what everyone is upset about. Sure they may feel that the offer is less than what it should be, but it's $11.50.

I stopped reading at this point since there's no point in going further after that opening statement.

Someone who is not a unit holder may be the most objective at this point.

I'm not sure why only unitholders would have anything valuable to contribute to the discussion.

Actually, I have yet to see any valuable contribution to the discussion from a non-unitholder. All I've read so far is "what are you people complaining about? You should be glad they're giving you $11.50. Because if you don't take that, the price will go down to 0, and Cedar Fair will go bankrupt, and I won't be able to ride Maverick again, and it will all be your fault."

If any non-unitholders have something valuable to add, fire away. Now something like "RGB, let me send you a check to make up for some of the loss you'll incur if this deal goes through" would be very valuable to this discussion. It's easy to be objective if you have nothing at stake. But then, who says discussions like this have to be objective?

Hopman, they may be thinking about which coasters to tear down so they can put in a casino,1200 condos, and some trendy boutiques (kind of like the Coney Island proposals).

Right, it's way more valuable to insinuate that if this sale does goes through then the parks will be torn down, you'll never get to ride Maverick again, and it will be all our fault for taking the deal.

Uh, if you say you don't see why people would be "upset" over $11.50, you probably haven't thought about the fact that perhaps people paid $20 or more. That has nothing to do with being objective, it has to do with not paying attention.

No one said non-unit-holders didn't have anything to contribute.

Uh, I guess that's true if you only read part of the point being made. The rest was a suggestion that $11.50 is more than nothing and there is a chance the stock would become worthless as things are at the moment. That may not be true or accurate, but if you stopped reading the post at the first part of the opening statement, then you didn't understand the point being made.

And perhaps those are valid points, but saying you can't understand why anyone wouldn't be happy with that is pretty silly from where I sit.

... they may be thinking about which coasters to tear down so they can put in a casino,1200 condos, and some trendy boutiques (kind of like the Coney Island proposals).

Who wants to buy a condo in Sandusky? ;) Granted, a casino would bring in more jobs, but still.

Now if they wanted to teare down Cedars, that might work better.

Demolish Mean Streak, and build some casinos, and I wouldn't mind at all. Casino are cool.