Cedar Fair seeks buyout.

[FlyingScooter]

http://www.nypost.com/seven/07092007/business/ticket_to_ride_business_peter_lauria.htm

 

I find this interesting, almost Six Flagsish.

[TopThrill182]

Never really saw this coming...

[asr]

I didn't see this coming either. Time to go round up 4 Billion dollars then

[RollerC]

I hope to god that Kinzel leaves. He's whats really killing Geauga Lake and we need a new face in charge.

[Homer]

I always had some thought that Cedar Fair might become the next Six Flags. Guess it came right, time for less trashcans in parks as a measure of cost cutting!

[asr]

I hope to god that Kinzel leaves. He's whats really killing Geauga Lake and we need a new face in charge.

 

Kinzel won't be leaving until 2012. That is, if Cedar Fair isn't sold, but if it is, they want to keep the same managment, which I would assume includes Kinzel.

[coasterdude5]

I'm confused, why are they doing this? I can't keep up with these corporate maneuvers...

[TheGreatOne]

^ They did the same thing Six Flags did. They spent too much money acquiring parks and they're in over their head. I called this back at the Paramount purchase, but this is much sooner than I expected.

[christianscoasters]

Damn, and I was wanting them to buy wild west world.

[ginzo]

^ They did the same thing Six Flags did. They spent too much money acquiring parks and they're in over their head. I called this back at the Paramount purchase, but this is much sooner than I expected.

 

I don't think that's what's happening here, at least not according to that article.

 

Kinzel's desire to remain on board after a sale is no doubt fueled in part by the wave of leveraged buyouts with terms that not only kept managers in place but signed them to lucrative contracts with equity stakes.

 

It sounds like the management team is just fishing for a better deal. And firms going private is the new black these days. If they can offload the debt to another firm, retain control of the business, and make more money in the process, then more power to them.

[downunder]

There's plenty of cashed up private equity groups roaming the globe looking to buy things at the moment, they have certainly been looking at buyouts in Australia. Though, there are more profitable investments than most amusement parks chains.

 

Still a very surprising move, they might sell out to a private equity investor and if they are not happy down the track buy Cedar Fair back for a much lower price.

 

I don't think it is clear at the moment whether they have gotten themselves into a six Flags situation with the Paramount purchase but I guess time will tell.

[jamessanders]

As 'Ginzo' said, public companies going private is very popular at the moment. This move does not mean Cedar Fair are in trouble, in fact, probably the opposite.

They simply want to go private to avoid the expense and inconvenience of being a public company. Which includes having to report everything to everyone and being forced to focus on short term goals and profits; to get the best shareholder returns straight away.

Private companies can have long term strategies and don't have shareholder returns as their number 1 priority, instead they have the long term growth of the business as their priority.

Usually private companies are more profitable than public ones.

[Jew]

I see this as an admission that the current CF management team sucks ass. They see the writing on the wall...and want to erase it before shareholders force all of them out for poor performance in a few years (or less).

[jamessanders]

One of the criteria for the buyout is that the current management team stay. So obviously, the board has total faith and is happy with them. It is not a submissions that they are doing a bad job.

[EastCoastn07]

I find it really funny that all this is happening right after Six Flags Inc. went through all their share of financial problems. I guess Kinzel's great acquisition of the Paramount Park's wasn't as great as he made it seem. You'd think after watching Six Flags dig themselves into billions of dollars of debt that Cedar Fair would learn something, but no, they did the exact same thing SFI did years ago when they started snatching up every possible park in the United States.

 

Seriously, for all those who say this isn't happenign because of financial problems, should think about this for a moment. The company is more than a billion dollars in debt, so just think how long that is going to take to pay off at the rate they are going at. It's just kinda funny that Kinzel and Co. got the Cedar Fair company in all this trouble, and they are the ones that want to stay if and when the company is sold. That just doesn't make any sense, but I guess Kinzel just likes to spend other people's money and not have to worry about the consequences.

 

If Cedar Fair gets sold, I really hope Dick Kinzel and the rest of the management goes with the old ownership, because from how I see it, I just think Kinzel is doing more bad for this company then good. Yeah, he did some pretty good things for the company years ago, but in the last few years I just can't mention anything he has accomplished that has set the company above the rest. I just think its time for Cedar Fair to move on and start fresh, it would be a lot better for the company if they didn't have someone in charge who only cared about one of the parks.

[Masked_Maverick]

I officially weep for Geauga Lake's future. I have been tyring to be optimistic about things for my homepark but with this news I am starting to doubt things.

[jamesdillaman]

This actually most likely means nothing for amusement park goers at cedar fair properties. Don't sweat it until something actually happens. Companies go "Capital shopping" all the time.

 

I see this as a good sign for Cedar Fair, and investors do, too. The end of the article said Cedar Fair stock rose after this announcement.

 

-James Dillaman

[307]

I'm sorry but I don't understand a damn thing about that article or this thread. Can someone put it into "stupid" so I can understand?

[Swoosh]

I just think its time for Cedar Fair to move on and start fresh, it would be a lot better for the company if they didn't have someone in charge who only cared about one of the parks.

 

You honestly don't understand how the chain works at all do you?

 

The board is who makes the decisions. Kinzel is only one voice on that board -- he alone does not make the decisions. Under the board then you have Regional Mgrs who have 4 or so parks that they watch over. Next you have the individual parks which each have their own GM who is the person in charge of everything that goes on there. Then there is a whole bunch of people and "yes sirs" under them.

 

One reason I don't want the mgmt to change is the fact that Worlds of Fun is the home base for our Regional Mgr - Phil Bender. Since he was originally WoF's GM, he still has a lot of pull on what goes on there and he has really worked wonders at the park.

[Thom25]

OK, i'll throw in my $.02 since I work for Dunkin' Donuts which was just purchased by a venture capital firm (Baine Capital).

 

Anyway, the buyout will bring a significant amount of revenue to the owners of CF, allowing Mr. Kinzel to "sell" all his units, and recoup a very nice profit (hopefully). The management team is going to stay in place so operations should not suffer. Once complete, the buyout will have consist of VCs, who will want to secure their projected ROI. I have said on another board, I think this will be the beginning of the end of Geauga Lake. Rides started to leave this year, and I predict more will be moved next year, when the buy-out is finalized. Maybe one more year of ride removals, and a "new" Geauga Lake will emerge, probably a large family oriented water park. I believe the VC firm will be the perfect partner to develop the remaining GL property. We now GL is unprofitable, so by significantly reducing the park eliminates the need for significant new rides throughout the chain, while bringing in additional revenue from any sale or redevelopment of the GL property. Both would go a long way to help reduce CF's existing debt!

 

The above is pure speculation on my part, and I suspect additional changes would occur throughout the chain to get it back on track. I also speculated on another board that given the timing of the Paramount deal, Mr. Kinzel's contract extention, GL ride removals, and Bear Stearns involvement in both deals, the buyout could have been part of the plan from day one.

 

It will be fun to follow. But knowing first hand how VC's work, they are purely money motivated, which I don't think boads well for GL.

 

Conversely, keeping the existing management team in place, ensures the "core" business of the "new" Cedar Fair will be maintatin. Many public companies like ARAMARK have gone private to return to the public sector a few years later more focused and profitable.

[Guest]

I see this as an admission that the current CF management team sucks a$$. They see the writing on the wall...and want to erase it before shareholders force all of them out for poor performance in a few years (or less).

Exactly, Cedar Fair sucks anyway. I dont get why so many enthusiasts think CF is any better than any other theme park chain. CP is great and well managed, but many other parks Cedar Fair ran into the ground (cough Knotts) and most of their parks suck anyway....

[ginzo]

Exactly, Cedar Fair sucks anyway. I dont get why so many enthusiasts think CF is any better than any other theme park chain. CP is great and well managed, but many other parks Cedar Fair ran into the ground (cough Knotts) and most of their parks suck anyway....

 

I agree that Cedar Fair isn't all that great. Six Flags unquestionably has a better collection of rides if you look compare the two chains. Cedar Fair may have ran their parks a little bit better in the past, but Shapiro is rapidly closing this gap.

[Swoosh]

I think this will be the beginning of the end of Geauga Lake. Rides started to leave this year, and I predict more will be moved next year, when the buy-out is finalized. Maybe one more year of ride removals, and a "new" Geauga Lake will emerge, probably a large family oriented water park. We now GL is unprofitable, so by significantly reducing the park eliminates the need for significant new rides throughout the chain, while bringing in additional revenue from any sale or redevelopment of the GL property. Both would go a long way to help reduce CF's existing debt!

 

Honestly, that is what they should do anyway regardless if they sell out. It was quite obvious when I visited the park, what was the draw of Geauga Lake. I still think that building up the waterpark and throwing in the towel on the ride side would be the best thing for this park. There is plenty of rides on the ride side that could be distributed throughout the chain at the other 10 (I'm leaving CP out of this) parks in the chain that they wouldn't have to spend additional capital next year on anything "new". The only costs would be the removal and transportation to the other parks. Once that is done, sell that side for condos. There is a lake there, why not make it lakeside condos. I KNOW you can make more money with condos then that ride side of the park.

 

Also I'm not just saying that because I want Dominator at Worlds of Fun, it just makes good business sense. Cedar Point is never going to have a huge waterpark, and Geauga Lake cannot compete with Cedar Point -- so MAYBE a huge waterpark would be the best fit?!?! I don't know, makes too much sense.

[BrownStreak]

Here's the odd thing- in 1997 there was this company called Premier Parks and they bought the Six Flags chain from Time-Warner and changed the name of their company (like when Nations Bank bought Bank of America) and in the past 10 years they have sold off almost all of the parks that were not Six Flags parks prior to 1997 so it was like what was the point? I wonder if a similar thing will happen with Cedar Fair- their lower producing parks get sold off/closed...

[Swoosh]

Poor GL, MIA and Carowinds.