The ins and outs before the SFWoA purchase from CF.

Thursday, March 11, 2004 10:51 AM
I was just curious if anyone knew what was taking place before CF purchased SFWoA.

Did SF approach CF or vice versa?

How long has SF wanted to sell this park? This seems to have been a last minute decision.

Were any other companies besides CF interested in the SFWoA property and if so, who?

Did SF and CF start negotiating a price that finally led to the 145 mil price tag? (Example: SF starts at 200 mil and CF counters with an offer of 130 mil).

I am sure some people here knew what was going on prior to the official announcement yesterday. This was a very well kept secret.

Thursday, March 11, 2004 11:02 AM
On other sites there were a couple of people making claims last summer that SF was going to dump WoA and potential buyers were visiting the parks.

I am sure this wasn't a last minute decision but it is hard to say how many people at Cedar Fair were involved in the process. I still have some pretty good contacts and I never heard a peep about it.

I doubt we will ever hear anything on the process of the negotiation. It isn't really good business to open that up...unless Mr. Kinzel writes a book one day ala Michael Eisner.

Six Flags has been making public statements for at least a year...probably longer, that the Aurora property wasn't meeting it's expectations and was hurting the bottom line of the company.

As for other suitable buyers, it is hard to say. I doubt that Paramount would have been that interested because it is an in-state competitor that they wouldn't have the possibilites with like Cedar Fair does. The bus ride from Kings Island to Geauga Lake is over 3 hours if I'm not mistaken.

Disney has their hands full right now and they have yet to delve into seasonal markets.

Kennywood might have been able to crosspromote Geauga Lake with the Pittsburgh park but I don't know if they have $145 million to spend on it.

I don't know how many other legitimate buyers were really out there. *** Edited 3/11/2004 4:04:17 PM UTC by wahoo skipper***

Thursday, March 11, 2004 11:21 AM
Busch Gardens Geauga? :)

While feelers may have been started last year, it feels like Six Flags only began considering it in earnest after last year's final corporate results. April isn't an ideal time for aquisition, and the marketing, staffing, and financing details seemed fairly vague in the telemarketing call. While I'm sure Cedar Fair will get them straightened out, they probably would have appreciated more time.

Thursday, March 11, 2004 12:00 PM
Well Sea World, owned by Busch, got out of Aurora so I just assumed they wouldn't have been interested in going back. I think that would have been a very nice "Busch Gardens" property but the animal experts must have had their reasons for leaving.
Thursday, March 11, 2004 12:07 PM
Since the end of last season there have been rumors floating around the park that Busch was comingto to buy us back. The faded but came back on Thursday(3-4-04). Again I just took it as rumor mongering since it was something we liked to do at the park. I guess however should have took it a little more seriously, only the names were changed to protect the innocent.
Thursday, March 11, 2004 12:14 PM
Yes... reasons for leaving Aurora...

San Diego average temperature: 64.2
San Antonio average temperature: 68.6
Orlando average temperature: 72.3

Cleveland average temperature: 49.6

Clearly, it was too cold for the experts, and not cold enough for the penguins. Experts win.

Thursday, March 11, 2004 1:41 PM
Sure you can say that, but alot of reasons why Sea World left is because their new company plan included rides, which were forbidden by an agrement with Funtime Inc. Geauga Lake won't build animal attractions, and Sea World won't build rides. Everyone's happy, right? Well, not after Busch realizes animals just won't cut it anymore- their parks have to have rides.

As for buying the park, of course no one at SFWoA knew, this was strictly between the two corporate offices. I couldn't tell you who came to who first, but considering the steal that Cedar Fair made for only $145 million, you have to believe that Six Flags was more willing to sell then Cedar Fair was willing to buy. The gurus at CF are smart people, and they won't buy something unless they get a good deal (Visionland's failed transfer comes to mind). Six Flags needed the money, not the loss, so I'm sure they were willing to take a bit of a hit in order to get anything for the property.

Thursday, March 11, 2004 2:29 PM
The word around the camp fire from People Who Know(TM) is that Kennywood was interested in the property. I kid you not. The problem is that they could be easily outbid by Cedar Fair, and certainly doesn't have the same financial devices to fund the purchase.

Further word is that the sale of Six Flags properties is not done yet.

As an aside... most people under senior management at both parks knew nothing about it until 8 a.m. yesterday morning. It was a very well guarded secret.

Remember when we many of us agreed that selling parks was a bad idea because you cut off the revenue stream that can pay off your debt? Well, the big surprise there is that SFWoA was only generating a profit of $16 million, according to the conference call.

That also tells you something about what Cedar Fair thinks it can do. One anaylst who has followed Cedar Fair for years asked how they justified buying a park at nine times its annual profit, compared to other acquisitions at four to five times (i.e., quicker return on investment).

So you do the math in terms of what their profit expectations are. We can assume it won't be huge this year, but in the long term, can we expect they want to generate $28.6 million a year in profit? ($143/5) Time will tell.

Thursday, March 11, 2004 2:35 PM
That $16M was a three-year average, too. Last year sounded substantially less than that. (Of course, this means that three years ago they did substantially more.) It will be interesting to see how high they can push it, but one thing we do know about CF is that they know how to run parks at a healthy profit.
Thursday, March 11, 2004 2:36 PM
$16 million a year? Wow, I knew it was bleak but yikes. The two park scenario was sucking them dry.

Sea World, Ohio was always on top of my list as one of the most beautiful parks in the country. A nice resort hotels up in those trees should would be appealing to me...maybe even with an indoor waterpark perhaps?

I see a lot of great possibilities with that property and have said for many, many years that Geauga Lake/Sea World had great potential under the right leadership.

Thursday, March 11, 2004 2:39 PM

Further word is that the sale of Six Flags properties is not done yet.

Burke was quoted in his own press release as saying:

We do not expect any additional park dispositions to occur.

So it will be interesting to see. *** Edited 3/11/2004 7:40:12 PM UTC by Brian Noble***

Thursday, March 11, 2004 3:05 PM
Interesting trivia about the sales of Geauga Lake...

Geauga Lake was nearly sold in 1986, ten years before Premier Parks bought it. The would-be buyer? Harcourt Brace Jovanovich. HBJ's interest? They owned Sea World at the time.

Funny how things turn out, isn't it?

--Dave Althoff, Jr.

Thursday, March 11, 2004 3:07 PM
I really wish someone would write a nice history book about Geauga Lake, ala the Cedar Point book. The history of the place really is fascinating.
Thursday, March 11, 2004 4:28 PM
I will have to agree with Zero-g's comments about Busch not buying. From my understanding Busch/Sea World had the opportunity to buy the Gl/Sfwoa side, and they declined. After they declined the sale the owners of GL had it in the contract that Sea World could not build rides (they were leasing the land) and whoever bought the GL side must keep it that way. As Sea World turned into an adventure park and starting building rides SWO was stuck and was forced to build attractions like Pirates 3D and so on. I could be completely wrong though i'm only an enthuisiest.
Thursday, March 11, 2004 6:20 PM
So does the campfire continue to crackle around Kennywood? If so, that's very refreshing news to hear that they're that far into the black that acquisitions are in the realm of possibility ... I have a couple of ideas, but they're probably too out there ...

Just, if Kennywood ends up owning Darien Lake and/or Wyandot Lake before year's end, you can say you saw it here first ;)

... then again despite a few people's well-voiced opinions, I'm sure SFDL still brings in the cash, so maybe Kennywood's just gonna have something big up their sleeves to stay in competition in the next few years ...

Thursday, March 11, 2004 8:59 PM

Jeff said:

As an aside... most people under senior management at both parks knew nothing about it until 8 a.m. yesterday morning. It was a very well guarded secret.

I'll say. I have a hunch that the deal itself materialized awfully quickly. Just two days earlier the company had announced a dividend increase. Something tells me that the deal wasn't such a sure thing then because they could have saved a press release and combined the two into one announcement -- making a statement that even though the company is committing $145 million here it is STILL comfortable in hiking their unit payouts.

Thursday, March 11, 2004 9:05 PM
At Solace we were told Friday night that Jack Falfas was not there because he was at a CF Meeting in Palm Springs (or was it Palm Desert). It might have been then that the managers were informed of the acquisition.
Thursday, March 11, 2004 10:16 PM
I honestly enjoyed the park overall the last couple of years and only wished that they would have got around to adding the Lost World, the dark ride, the hyper coaster, etc. Six Flags basically gave up, because that park really would have had promise if they did all these things, and like I said, I still liked it anyway and will be sad to see the penguins, reptiles, acquarium, etc. go. Barring of course Cedar Fair is smart and instead of getting rid of that side, uses it for further development to create a truly remarkable megapark by adding say some dark rides.

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