Texas investor accumulates 17% of Cedar Fair units, will vote against Apollo acquisition

Posted Tuesday, February 9, 2010 12:29 PM | Contributed by Jeff

Texas investment banker Geoffrey Raynor has vowed to block the Cedar Fair deal with Apollo. SEC documents show Raynor now controls 17 percent of Cedar Fair's outstanding units, up from the 9.8 percent he held Jan. 20. That's the biggest chunk of Cedar Fair units controlled by any single voter.

Read more from The Sandusky Register.

Tuesday, February 9, 2010 12:35 PM

This to me says that there's a real chance with enough big players invested to force regime change after the deal is voted down. I just can't imagine that there's a chance in hell that it'll pass at this point.

In some ways, maybe that's more scary than if the deal had gone through, but I suppose time will tell on that one.

+0
Tuesday, February 9, 2010 1:13 PM

Does anyone know if Raynor's group has tried to force regime change anywhere else? I get the feeling that they're just trying to make a quick buck. If the stock bounces after the no vote they'll probably sell. If the units tank then they'll probably be forced to make some real noise in order to get their investment back.

+0
Tuesday, February 9, 2010 2:16 PM

I can't picture this passing but any type of regime change...or push for it...is going to get ugly.

+0
Tuesday, February 9, 2010 2:34 PM

Seems incredibly unlikely that the deal will go through as initially disclosed at this point. Not sure why CF/Apollo would even want to put it before unitholders particularly as long as the stock price is above $11.50. If any unitholder wanted out at $11.50 they could sell now for more without waiting for the sale to close.

Having the deal fail is not without issues. Uncertainty is probably the biggest one. At this point, it looks like CF will need to refinance its debt on its own. Cash flow will be critical to reduce leverage to make that possible. They may try to pursue other financing options such as a public debt or equity offering. Economy won't help with any of that.

There may be enough concentrations of equity ownership to see some movement on the management front. How easy would it be to find someone looking to take the reigns at this point? What changes will they make to turn things around quickly (which is probably required to be able to re-finance)?

Typically the stock price goes down after a proposed sale is voted down. But that is because the sales price was at a premium over the value of the stock such that the stock price went up in anticipation of the proposed sale price. Here the price went up if I remember right after the deal was announced but then kept going up past the proposed sales price in large part because certain folks were buying large numbers of units. Since that time, the price has pretty much steadily declined though its still higher than the proposed sale price. Not clear what the price will do if the sale is voted down.

+0
Tuesday, February 9, 2010 4:48 PM

Wow, could we see a sequal to what happened with Six Flags back in 2005?

+0
Tuesday, February 9, 2010 4:57 PM

GoBucks89 said:
There may be enough concentrations of equity ownership to see some movement on the management front. How easy would it be to find someone looking to take the reigns at this point? What changes will they make to turn things around quickly (which is probably required to be able to re-finance)?

Financial aspects aside....it would be pretty cool if somehow the best of the paramount regime could be brought in to oversee changes INSIDE the parks... :)

Not sure if we could get Siebert out of New Braunfels, though... ;)

+0
Wednesday, February 10, 2010 8:21 AM

There is some Paramount talent within CF. Richard Zimmerman came from Viacom corp, has New York connections, and has more finance experience than the current regime put together.

And the guy that had been finance VP at KI and Caro, and is now GM of Dorney had quite a reputation within Paramount for being able to make a nickel act like a dime.

Just need to get rid of a little deadwood, and let the cream rise to the top.

The Paramount guys continually updated the finance model. They didn't set a budget in January, and run it to the end of the season. The ran their model monthly, looked at performance and projected performance, reprojected budgets, and adjusted marketing accordingly.

I think that may be part of the reason CF overpaid for Paramount. The books at Paramount were more complicated than something you can run in Quicken. CF thought there was fat they could cut out easily, and it turns out they were cutting muscle.

+0
Wednesday, February 10, 2010 8:52 AM

Oh, and while I think getting Mr. Siebert back would be a positive move, and would help the image of the parks, right now they need the finance guys. Get the pressure off the financials, and then let the park guys do what they know how to do.

+0
Wednesday, February 10, 2010 3:12 PM

Makes one wonder if anyone from the former Paramount Parks is working with Geoffrey Raynor's group to wrestle control of the company.....hhhmmmm?!?!??!?!

+0
Wednesday, February 10, 2010 4:02 PM

I don't think anyone wonders that at all. Those people have all moved on with their lives.

+0
Wednesday, February 10, 2010 4:38 PM

I'd like to see the deal fail.. only because I can't see how one company will just continously fund a set of amusement parks that aren't doing too well. I'm just thinking from the customer stand-point that the customer service and quality of service will decrease to new-lows just because the company is being funded by a big time supplier of cash without thinking about the customers. I hope I am wrong, though. And, if the deal were to pass, the current regime stays.

And I am totally up for a new regime. Kinzel is brainwashing the rest of his team and it's spreading like cancer. Paramount's regime for those who are still involved, have some real talent and hopefully have not been brainwashed.

All I ask is that each park has it's own identity. If you look at the 5 former Paramount parks, they all have the same landscaping, the same rides, and the same names... something I hate, a lot. CF is already doing this now more than ever and hopefully that will be stopped no matter who's in charge.

</rant>

+0
Wednesday, February 10, 2010 5:54 PM

Meeting for vote on Apollo sale has been set for March 16th. Units closed at $11.50 today.

http://www.cedarfair.com/ir/press_releases/index.cfm

Last edited by GoBucks89, Wednesday, February 10, 2010 5:55 PM
+0
Wednesday, February 10, 2010 7:32 PM

OK, it's been in my brain too long... "Showdown with the Apollo". :)

Come on, some of you have got to *get* that reference... ;)

+0
Wednesday, February 10, 2010 8:09 PM

lol. You're funny. I'm glad you were able to finally let that out. :)

+0
Thursday, February 11, 2010 1:45 AM

CoasterInsider said:
I'd like to see the deal fail.. only because I can't see how one company will just continously fund a set of amusement parks that aren't doing too well.

It's not they aren't doing well, it's that they're doing mediocre. Mediocre won't cut it when you over-paid for half of those properties and are now stuck with the debt from buying them.

+0
Thursday, February 11, 2010 9:37 AM

This is true Jeff. :)

+0

You must be logged in to post

POP Forums - ©2018, POP World Media, LLC
Loading...