29yrswithaGApass Posted February 1, 2022 Report Share Posted February 1, 2022 Theme park stocks jump on report indicating SeaWorld and Cedar Fair are in M&A talks Feb. 01, 2022 11:19 AM ETSix Flags Entertainment Corporation (SIX), FUN, SEASBy: Clark Schultz, SA News Editor ekkawit998/iStock via Getty Images Theme park stocks went for a roller coaster ride in morning trading on a report that SeaWorld Entertainment (SEAS-1.6%) made a $3.4B takeover offer for Cedar Fair (FUN +10.8%). Bloomberg reports the bid for FUN was at $60 per unit. Sources indicate the companies are currently working together on a proposal. Cedar Fair (NYSE:FUN) has traded as low as $39.15 over the last year, but stood at $55.18 at last check. Shares of Cedar Fair were halted for trading earlier in the session. Six Flags Entertainment (SIX +3.6%) also broke higher on news of the sector M&A activity. Compare valuation marks on Cedar Fair, SeaWorld and Six Flags. 1 Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 1, 2022 Report Share Posted February 1, 2022 SeaWorld has been really doing a great turn around, and Cedar Fair has been stumbling lately. Not too surprising. I figured they'd either make a run for Cedar Fair or Six Flags, but I think Cedar Fair is the better fit for SeaWorld's portfolio. 1 Quote Link to comment Share on other sites More sharing options...
29yrswithaGApass Posted February 1, 2022 Author Report Share Posted February 1, 2022 Cedar Fairs confirms it will review buyout offer from SeaWorld Feb. 01, 2022 12:54 PM ETFUN, SEAS, SIXBy: Clark Schultz, SA News Editor3 Comments Claudiad/E+ via Getty Images Cedar Fair (NYSE:FUN) confirmed that it has received an unsolicited non-binding proposal from SeaWorld Entertainment (NYSE:SEAS). The company says its 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 theme park operator and its unitholders. Cedar Fair unitholders are advised that they do not need to take any action at this time. The sector was pushed into the spotlight earlier today when Bloomberg broke the FUN-SEAS merger development. Cedar Fair turned down a $70 per share deal from Six Flags back in 2019 a few months before the pandemic turned the lights off on the sector. Shares of Cedar Fair (FUN) rose 10.26%on Tuesday to $54.98 vs. the reported SeaWorld offer at $0 per share. Shares of SeaWorld Entertainment (SEAS) gained 4.32% to $62.05 vs. the 52-week trading range of $30.55 to $70.48. Shares of Six Flags Entertainment Corporation (NYSE:SIX) shot up 4.58% to $41.30 vs. the 52-week trading range of $34.96 to $51.75. Read why Six Flags (SIX) looks like an attractive stock to Oppenheimer. Quote Link to comment Share on other sites More sharing options...
Yoshi Posted February 1, 2022 Report Share Posted February 1, 2022 I think it would be good for the smaller CF parks if this deal happens. SEAS seems to add new rides and attractions to their parks frequently. With CF, the large parks get additions often but the smaller parks get almost nothing with a park such as Valleyfair having their last coaster addition 15 years ago. Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 1, 2022 Report Share Posted February 1, 2022 SeaWorld has already shown they know how to run multiple parks in the same market, with Busch Gardens Tampa and SeaWorld Orlando being just about as far apart as Kings Dominion and Busch Gardens Williamsburg. They offer unique things and share passholders. I'd guess the same kinds of things could happen with BGW and KD, and even Dorney and Sesame Place. If people can get passes for multiple parks for just a few dollars more. SeaWorld Parks have been quite successful in creating events to bring in those passholders and get them to spend money all year, but not give away the gate the way Six Flags does. They have created a successful business model and can expand that with more parks. The Dear Fair parks are in good shape in the way of their appearance and upkeep, as well as reputation. I think this could be a successful merger. As it is I know many guests who have BGW and Sesame Place passes specifically buy the Platinum passes to come to Orlando for a visit in the winter. Adding more parks in Ohio, North Carolina, Pennsylvania, etc, adds more of those guests who can see the value of spending more for those passes with all the opportunities to visit other parks. I'm hoping that it happens because I'd go to several Cedar Fair parks if I could use my Platinum Pass for SeaWorld. I've never been able to justify the CF pass for the couple of times a year I might get to one. Quote Link to comment Share on other sites More sharing options...
29yrswithaGApass Posted February 2, 2022 Author Report Share Posted February 2, 2022 If the merger takes place I wonder if they will sell off any of the acquired parks and if so if Six Flags will go shopping. Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 2, 2022 Report Share Posted February 2, 2022 I had the same thought. Really the only candidates I could see would be Michigan's Adventure, Valleyfair and Great America as obvious choices. Quote Link to comment Share on other sites More sharing options...
Medusa42 Posted February 2, 2022 Report Share Posted February 2, 2022 It might make sense to rip out the big coasters and convert Michigan's Adventure to a Sesame Place. It sounds like this is an all cash offer, which makes it much stronger than the previous Six Flags stock for stock offer, even though it gives Cedar Fair a lower valuation. This might be a good time to rebrand the parent company as Cedar Fair or a new company name. Limiting the SeaWorld name to a few parks and not the parent company would help cleanup the company image. I am curious if Scott Ross will let Cedar Fair management run the new company, while he slowly cashes out his majority stake. Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 2, 2022 Report Share Posted February 2, 2022 Here's a good analysis of the deal: https://www.fool.com/investing/2022/02/02/seaworlds-34-billion-offer-for-cedar-fair-is-a-win/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article Quote Link to comment Share on other sites More sharing options...
Medusa42 Posted February 5, 2022 Report Share Posted February 5, 2022 Some analysts think Six Flags might make an offer. https://www.streetinsider.com/Analyst+Comments/Speculation+Six+Flags+(SIX)+Could+Join+the+Fun+as+Cedar+Fair+(FUN)+Targeted+in+Takeover/19559636.html Quote Speculation Six Flags (SIX) Could Join the 'Fun' as Cedar Fair (FUN) Targeted in Takeover February 4, 2022 9:06 AM EST Since SeaWorld Entertainment (NASDAQ: SEAS) launched an unsolicited $60 per share, or $3.4 billion, takeover offer for Cedar Fair, L.P. (NYSE: FUN) earlier this week speculation has turned to if rival Six Flags (NYSE: SIX) would again join the fray for the Sandusky, Ohio-based amusement park operator. In 2019, Cedar Fair rejected a $70, or $4 billion, cash-and-stock offer from Six Flags. Commenting on the speculation today, Stifel analyst David Katz said given the fact that Six Flags was willing to acquireCedar Fair at a higher valuation back in 2019 it could revisit its past offer, even though the board and management have largely changed since that time. Katz said Six Flags could reasonably acquire Cedar Fair at $60-$80/share, which assumes a leverage ceiling is 4.5X, a mix of stock at $35, and debt assumption that leaves the value of SIX at $47-$57/share. The analyst highlights that the current Six Flags CEO, Selim Bassoul, in his past leadership positions at MIDD has been an active acquirer of roll-up opportunities. Further, the analyst highlights that the geographic overlap between the companies is limited to four of Six Flags' 19 markets. In addition to being a buyer, Katz thinks Six Flags could also make sense as a seller. "On a comparative, normalized basis, SIX EBITDA margins have ranged between 36%-38% and are expected to be 36.5% according to our estimates," Katz notes. "This compares with FUN, which has ranged from 33%-36% and more noteworthy, SEAS at 40%-42%, according to current consensus, which suggests there could be profit opportunities within SIX as a target." Overall, however, the analyst sees the Six Flags as more of a buyer than a seller and he continues to like the stock. Six Flags has not commented on rumors it could again be looking at Cedar Fair. Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 9, 2022 Report Share Posted February 9, 2022 So one week later and no news, but it's important to note that when Six Flags offered in 2019 Cedar Fair said no within two days. My guess is they're weighing the offer and creating a counter offer. Here's some analysts takes on the possible merger: https://www.fool.com/investing/2022/02/07/what-does-wall-street-think-about-seaworlds-34-bil/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article Cedar Fair is having their quarterly financial report next Wednesday, so I'm guessing we'll hear something more then, if for no other reason than there will be questions in the Q&A portion. Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 12, 2022 Report Share Posted February 12, 2022 Another update: https://www.cinemablend.com/movies/the-seaworld-buy-out-of-cedar-fair-just-took-an-interesting-turn Quote Link to comment Share on other sites More sharing options...
Medusa42 Posted February 12, 2022 Report Share Posted February 12, 2022 Scott Ross was involved in taking Great Wolf Resorts private when he was a managing partner at Apollo Global Management in 2012. In 2015, Apollo sold Great Wolf Resorts to Centerbridge. In 2019, Centerbridge sold a 65% controlling interest in Great Wolf Resorts to Blackstone. Quote Link to comment Share on other sites More sharing options...
Medusa42 Posted February 16, 2022 Report Share Posted February 16, 2022 SeaWorld says their offer was rejected and they don't see a path forward. https://www.seaworldinvestors.com/news-releases/news-release-details/2022/SEAWORLD-ENTERTAINMENT-INC.-MAKES-STATEMENT-CONCERNING-CEDAR-FAIR/default.aspx 1 Quote Link to comment Share on other sites More sharing options...
GAcoaster Posted February 16, 2022 Report Share Posted February 16, 2022 So now do they go after Six Flags or just acquire parks individually? Quote Link to comment Share on other sites More sharing options...
The Master Posted February 19, 2022 Report Share Posted February 19, 2022 The rejection may be a good thing. Too many industries are becoming oligopolies. Quote Link to comment Share on other sites More sharing options...
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