SeaWorld Entertainment makes unsolicited $3.4 billion bid to buy Cedar Fair

Posted | Contributed by Jeff

SeaWorld Entertainment Inc. has offered to buy amusement park owner Cedar Fair for around $3.4 billion, people with knowledge of the matter said.

Read more from Bloomberg.

Cedar fair released this statement:

Cedar Fair, L.P. (NYSE: FUN), a leader in regional amusement parks, water parks and immersive entertainment, today confirmed that it has received an unsolicited non-binding proposal from SeaWorld Entertainment, Inc.

Consistent with its fiduciary duties, and in consultation with its independent legal and financial advisors, the Cedar Fair Board of Directors will carefully review and consider the proposal to determine the course of action that it believes is in the best interest of the Company and its unitholders. Cedar Fair unitholders do not need to take any action at this time.

Perella Weinberg Partners L.P. is serving as financial advisor to Cedar Fair and Weil, Gotshal & Manges is serving as legal counsel.

Vater's avatar

Cedar Fair stock increased 10% before trading was halted. Offer is about $60/unit. At $54.51 when trading was halted.

Jeff's avatar

If someone other than Ross was board chair, I'd say, cool, take Cedar Fair's better ride operations and combine them SeaWorld's culinary. I'd probably lean more on CF's IT as well, because it's less crusty.

Jeff - Editor - - My Blog

eightdotthree's avatar

Just when Cedar Fair thought they were out of the animal business they get pulled back in...

I've been really impressed with the Cedar Fair parks recently. I hope they turn their noses at this offer and continue doing what they have been doing.

The quality of experience at the SEAS parks has taken a straight nosedive during the last 5-7 years. They have made budget cuts in so many places, that the parks are a partial experience now. All of these cuts were in place before the pandemic. Cut hours, cut entertainment, closed food service throughout the parks, phased/partial park openings. I used to LOVE Busch Gardens, but all their little cuts have added up to a mediocre experience.

While the Cedar Fair parks have been improving their quality of experience. Better theming, more entertainment (pre-pandemic), renovations of parks etc.

In 2020, they didn't have cash to pay their construction vendor payments. I believe this purchase would be HIGHLY leveraged, and those normally end in bankruptcy. Cedar Fair was cash flowing much better than Busch before the pandemic.

This would not be good for the customers. SEAS has high prices, and low quality experience.

I remember when KECO was leveraged to purchase the Taft parks. The parks went severely downhill under KECO as they were using their cash to pay their debt.

Last edited by super7*,

I look at the SEAS parks like this:

  • Orlando price tag
  • Cedar Fair top tier park ride quality
  • Walmart operations and customer service (minus BGW)

Call me a Cedar Fanboy, but if this were to go through I would be sad for and worried about the Cedar Fair parks.

BrettV said:

I look at the SEAS parks like this:

  • Orlando price tag
  • Cedar Fair top tier park ride quality
  • Walmart operations and customer service (minus BGW)

Call me a Cedar Fanboy, but if this were to go through I would be sad for and worried about the Cedar Fair parks.

That’s a great analogy. But even BGW is garbage these days compared to how it was run a few years ago. Would they do a Geauga Lake on Kings Dominion? That would be sad as KD is such a gorgeous park (even with the Paramount/KECO damage) and it had so much potential

Last edited by super7*,
Morté615's avatar

I don't trust SeaWorld management right now so I wouldn't like to see this at all.

But I wonder if Cedar Fair will make a counter offer to purchase SEAS. They are probably still leveraged from the last acquisition and the Pandemic but I could see them taking the Busch parks and doing good things. And with the Management changes at Cedar Fair they may be more willing to take care of the animals.

Morté aka Matt, Ego sum nex
Dragon's Fire Design:

I would hate for them to pull a Kinzel and bite off more than they could chew. But it wouldn't break my heart to see them manage BGT.

I still don't see it happening either way though.

Listen, I can criticize Kinzel with the best of them...but the Paramount acquisition seems to have been a success when the dust settled. It didn't come without some pain...but you can't hit a homerun unless you swing the bat.

Jeff's avatar

There was a whole lot of hubris and pain in the Paramount acquisition that had lasting financial impact, some of which made Geauga Lake an intolerable risk. The only thing that saved Kinzel's ass was the rebound from the recession. I can't think of a bigger in-spite-of story.

Jeff - Editor - - My Blog

Agreed, the Paramount acquisition was the absolute right move long-term. And Kinzel had the balls (or ego or arrogance lol) to make it happen.

This acquisition would be a disaster for Cedar Fair. It was 18 months ago SeaWorld was defaulting on contracts because they didn't have the cash to pay their suppliers or builders. They have had 7 CEO's since 2015 and 4 COO's in that same time frame (now vacant again). The board chair and largest shareholder isn't interested in the long-term health of the company or the quality of their product/guest experience - he wants to micro-manage the company, strip expenses to bare minimum and cash out.

I would be shocked if there is an all-out acquisition with SEAS acquiring CF. I think perhaps the more likely scenario would be a merger --- but Scott Ross has such a pathetic reputation in hospitality and leisure space, I think it would give experienced people like Zimmerman, Ouimet and their other board members real significant pause

The rebound from the recession certainly helped but he (and most others) could not have predicted the entry into (and severity of) the recession to begin with. Perhaps Geauga Lake would have been sacrificed with or without a recession but a big part of the reason anyone is even offering $3.4 billion for Cedar Fair today is the Paramount Parks.

That said, I certainly also see (and was, in many ways, personally witness to) the side of him that benefitted from successes that happened even when he squared for a bunt and fouled it off.

Jeff's avatar

When you're still requiring your initials on room comps, and arbitrarily applying sales models to different markets and sizes, you're doing it wrong. I remember the higher per capita, lower attendance slide especially in the new parks, year after year. That wasn't sustainable. Again, it's an in-spite-of story, and not about his balls.

Jeff - Editor - - My Blog

No bring back Sea World Ohio comments?

Is there a record for the number of formerly breathing equines being hit in the same thread?

When I first saw this I honestly thought it was the other way 'round, with FUN offering to bail out SEAS. Honestly, I don't get this. Companies which in every possible way look to be in serious financial trouble offering to buy FUN?

SEAS does have a better reputation than SIX did. But even so, this is a company that has had complete, brand new rides sitting idle allegedly because they haven't paid for them, offering to buy a company which is known to pay cash for new attractions that are an order of magnitude more expensive. It just doesn't seem logical to me...the only way to do this would be for SEAS to take on a level of debt that it can, at this point, probably ill afford. Add to that the level of stability they've (not) had in their front office of late, and I can see very little upside for FUN from a deal like this. If all the unit holders want out for a quick payday, maybe. But that's Knott the profile of a majority of the FUN unit holders.

Back when the SIX offer was a thing, someone suggested the offer wasn't really a genuine offer; instead it was a matter of demonstrating to the shareholders and to the Board of Directors that the company was strong enough to raise that kind of capital, knowing it was unlikely that FUN would accept the offer. That seems like a lot of trouble to go through, but I guess it kind of makes sense.

My general thought on this one is that, like the Six Flags offer that preceded it, this "deal" is Knott going to happen.

--Dave Althoff, Jr.

    /X\        _      *** Respect rides. They do not respect you. ***
/XXX\ /X\ /X\_ _ /X\__ _ _ _____

tservo said: “No bring back Sea World Ohio comments?”

I commented on Facebook that there has to be a cheaper way for them to bring back SeaWorld Ohio…

The big difference between this offer and the Six Flags farce is this is an ALL CASH deal from SEAS. It’s not a trade for a stock that will be junk in a few years. CASH MONEY, BAYBAY!

But then again, what do I know?

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