Reuters is reporting that Six Flags has offered to buy Cedar Fair

Posted | Contributed by Jeff

Six Flags Entertainment Corp. has approached peer Cedar Fair LP with an acquisition offer, people familiar with the matter said on Wednesday.

Read more from Reuters.

Jeff's avatar

The company bailed on an investor conference, which implies that something is definitely going on.

There is one scenario that wouldn't be the worst. If it was in fact a merger, and Ouimet came out of semi-retirement (he's serving as executive chair for Cedar Fair, which is a hands-on board member), and he led the new company, that wouldn't be the worst thing.


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

zoug68 said:

^Funny, I drive by CP to go to Great Adventure as often as I can. Love my El Toro marathons for the last hour of every visit.

You think you’ll still get those marathon rides with Fast Lane making its way to Six Flags?


But then again, what do I know?

If true this is the ultimate extreme example of what happens when private equity has too much money to invest, and a lack of good targets. They’ll finance anything.

Stock tip: If this happens, short the hell out of it because it will go chap 11 in a very short time.

There are different ways an acquisition/combination of the companies could happen. Six Flags could buy all the outstanding units of Cedar Fair for cash but that seems very unlikely given the existing cash of both companies and debt capacities. There could be a merger of the two companies with one surviving.

Cedar Fair unitholders could also agree to exchange their CF units for Six Flags stock. Cedar Fair has a market cap of about $3.4 billion. Having the CF assets under the Six Flags umbrella would support the issuance of a lot of SF shares without diluting existing shareholders. They would need cash to pay expenses and any premium paid to CF unitholders. A lot less cash than they would need to buy CF units for cash (and some of it could come from debt).

And yes the combined entity would need to repay the debts of both companies. But it would also have the combined assets/cash generation capacity of both companies.

None of that is to say it makes business sense. From what I know, I am not sure it does. Unfortunately that often does not stand in the way of mergers/combinations. And maybe Six Flags is looking to acquire some of CF management.

Last edited by GoBucks89,

Jeff said:

There is one scenario that wouldn't be the worst. If it was in fact a merger, and Ouimet came out of semi-retirement (he's serving as executive chair for Cedar Fair, which is a hands-on board member), and he led the new company, that wouldn't be the worst thing.

Yeah, I agree. I don't see this as complete doom and gloom like many others. I like Cedar Fair parks and I like Six Flags parks... It doesn't really bother me if this goes down. As you said, it all just depends on how the management team is structured to handle the acquisition. Blending the better aspects of both companies and having the right people leading the effort is key. Neither company is perfect, both have things they can improve on.

Last edited by SteveWoA,

^ I agree. I think that the fact that Six Flags CEO is about to retire demonstrates the idea that this could be a blending of the talent. Obviously, a Cedar Fair approach to the Six Flags brand would be what most want.

I also find it silly that people think that Six Flags purchasing Cedar Fair automatically means "Six Flags over Sandusky". They'd be stupid to pull a stunt like that. I could see a Six Flags Valleyfair or Six Flags Worlds of Fun to help strengthen those smaller brands, but I don't see a huge "flagging" of the Cedar Fair parks, more of a behind the scenes operation and cost-saving synergies. The company that would emerge would probably be called something completely different with a "family of brands" similar to Herschend or Merlin.

https://www.merlinentertainments.biz/our-brands/

I’ve read so many posts from enthusiasts who are jumping up and down with excitement that their season pass would get them into every park in the nation.

I wouldn’t be so sure ‘bout all that...

Yep no guarantee the passes would be combined between companies and if they were I doubt the price would stay the same. Unlikely they would be giving out twice the number of parks for the same price I'm sure and since the closest Six Flags park to my house would be a pretty long haul trip it wouldn't really benefit me much personally to add the parks together under one company.

As for season passes, I see a tiered structure. Pick the number of parks you want passes to, pay a rate for that. Even if it's a pre-set number (one, three, five, all) and you get to choose the ones you want, people would like the option.

ShaneDenmark said:

zoug68 said:

^Funny, I drive by CP to go to Great Adventure as often as I can. Love my El Toro marathons for the last hour of every visit.

You think you’ll still get those marathon rides with Fast Lane making its way to Six Flags?

6 Flags already has a Flash Pass system. It's nothing near as bad as Fast Lane, but seems to be more expensive to implement. So, if 6 Flags wanted the cheaper, more obnoxious version, they could have implemented it before upgrading from the pagers to the electronic wristbands. Six Flags and even Hersheypark have fast passes for sale but still allow marathoning.

Hopefully, they don't bring Cedar Fair decisions to 6 Flags like no re-rides and adding seatbelts to rides like Nitro and the other 6 Flags B&M hypers.

Last edited by zoug68,

Breath a sigh of relief. Cedar Fair has supposedly rejected what was a $4 billion offer.

https://uk.reuters.com/article/us-cedar-fair-m-a-six-flags-entmt-ex...KKBN1WJ1Z3

I feel better now!!!!


There is no such thing as a terrible Coaster just ones that haven't been taken care of

Tekwardo's avatar

Whew.

I'm with Jeff on the idea of a merger with CF controlling the helm. I absolutely would not want to see Six Flags in control of CF parks.


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Don't cry because it's over, smile because it happened.

And our short, two day national nightmare is over

Jeff's avatar

Now if we could just get the longer one resolved...


Jeff - Editor - CoasterBuzz.com - My Blog - Phrazy

Browns are working on it. Oh, different nightmare. Sorry.

GoBucks89 said:
Browns are working on it. Oh, different nightmare. Sorry.

Could be worse, could be that team up north who's fan base prides themselves on sleepovers and giving up 62 points to your rival. #LoveHarbaugh, #LoveBrady, #LoveRichRod (Sorry off topic)

And I agree with Brett 100%, the Nightmare is over.

From an offer stand point, seems that Six was only throwing a boat load of stock at them. Had this gone through would SF even had the capital to run the company? I read that they only have around 125 million of cash. The merger would have left them with over 4 Billion in debt, or am I missing something. I just don't see how they could have pulled this off post merger? Or am I missing something?


There is no such thing as a terrible Coaster just ones that haven't been taken care of

Llama Drama's avatar

pkidelirium said:

An unsolicited offer. Why would CF even consider it? Just tell them to pound sand.

Cedar Fair buying Paramount created a debt situation that took forever to get evened out. Six Flags buying Cedar Fair would probably cause bankruptcy, and if they somehow survived that debt, they'd be putting low-budget junk and unnecessary RMC conversions all over. Hell, they consider those Loop things to be coasters, RMC'd a GCI, and apparently don't want to build a B&M ever again...

Right, to be fair I feel a big reason for that isn't so much them not willing to spend money as much as it is that the chain is so jampacked with B&M and big coasters in general leftover from the pre-bankruptcy overexpansion era. There's just not much need to build new B&Ms when Great Adventure, Magic Mountain, Over Georgia, Great America all have at least four each. Almost every park has a hyper of some sort. Heck, even La Ronde has 2 B&Ms.

And as we all know Paramount mostly starved their parks of B&Ms and dependable coasters in pursuit of the latest prototype. There were zero B&Ms to be found at KI, KD, and CW combined, and only 2 non-standup ones between Carowinds and CGA by the time Cedar Fair took over. So really, Cedar Fair sorta had no choice but to go coaster crazy on these parks in the past 13 years or so. Besides, I believe Cedar Fair they're going to be slowing down on coasters a bit in the coming years. So the trend of KI and CP getting coasters every 2-3 years might not hold anymore.

Though I really hope Vortex's plot doesn't sit empty too long....

Last edited by Llama Drama,
ApolloAndy's avatar

I don't get the hatred for Six Flags. I had SFoT as my home park for 11 years and now visit SFDK and CGA frequently. I just got back from a trip that included SFMM. Six Flags has never struck me as a premium park experience (Disney, Universal, or even SW/Busch) but it's fine for what it is: relatively cheap access to some amazing roller coasters and mediocre but acceptable service and ambiance.


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