Cedar Fair Corporate Development Discussion Thread (FUN)

[Bolliger&Mabillard]

A new chairman may not be that bad of an idea. It'd be nice to see someone with new ideas bring something to the table, and stop the practice of Cedar Point taking up 99% of the entire company's resources.

[Geauga Dog]

The Freeway system was a joke. You only were able to get two stamps and that was it. And the lines to get those stamps in the morning were just as long as some ride lines. If anything they could have used the five ride card system that SFGAm used prior to going electronic. You could use those cards on any ride that it was on the list for the day.

 

I'm glad that Dick is finally going, mainly as stated already that he was running the parks with a 1980/90's mentality. I look forward to seeing what his replacement will do with the company.

[Skycoastin Steve]

A new chairman may not be that bad of an idea. It'd be nice to see someone with new ideas bring something to the table, and stop the practice of Cedar Point taking up 99% of the entire company's resources.

How do you figure? They've spent over $20 million on coaster installations for four other parks in the chain since they built their last coaster.

[Bolliger&Mabillard]

Measuring what the company has done in the past three years to compensate what they've done (or neglected to do) in the past ten is a bit unfair. Alot of love went into the Paramount parks, but VF, MA, DP and even to an extent KBF could've benefited from more capital improvements outside of ride additions. I'm just hoping that whoever steps in after Kinzel uses more of a balance attack.

[chadster]

Vote Set for Jan 11 on splitting up the position of Chariman & CEO

 

First it was sued by its largest stockholder seeking to get a special shareholders meeting scheduled, then Cedar Fair LP Wednesday evening set the meeting for 9 a.m. Jan. 11 in Huron, Ohio.

 

The Sandusky owner of Cedar Point and other amusement and water parks nationwide was sued in Delaware by two Texas mutual funds earlier Wednesday because the meeting had not been scheduled. The two funds, known as Q Investments, hold more than 10 percent of Cedar Fair's shares.

 

Cedar Fair scheduled the meeting at the Cedar Point Center at the Bowling Green State University's Firelands College.

 

Q Investments wants to force the owner of Cedar Point and other amusement and water parks nationwide to separate the chief executive and chairman positions, now held by Richard Kinzel. The big shareholder also wants the firm to pay higher dividends.

 

Article

[ajc47]

Vote Set for Jan 11 on splitting up the position of Chariman & CEO

 

First it was sued by its largest stockholder seeking to get a special shareholders meeting scheduled, then Cedar Fair LP Wednesday evening set the meeting for 9 a.m. Jan. 11 in Huron, Ohio.

 

The Sandusky owner of Cedar Point and other amusement and water parks nationwide was sued in Delaware by two Texas mutual funds earlier Wednesday because the meeting had not been scheduled. The two funds, known as Q Investments, hold more than 10 percent of Cedar Fair's shares.

 

Cedar Fair scheduled the meeting at the Cedar Point Center at the Bowling Green State University's Firelands College.

 

Q Investments wants to force the owner of Cedar Point and other amusement and water parks nationwide to separate the chief executive and chairman positions, now held by Richard Kinzel. The big shareholder also wants the firm to pay higher dividends.

 

Article

 

Not a bad idea. But even with that, the damage done can't be repaired completely. Even getting rid of Kinzel may not fix it 100%.

[KevinM]

Trash can stocks just took a dive.

[KDcoasterMAN]

^LMAO, and the color Red filed for bankruptcy.

 

It's filing for employment with Six Flags which it may find work!

[KI Kidd]

While I am certainly of the belief that the time has long come for Kinzel to leave, this really does feel like a money grab by Q, not an investment in the company's long term health.

[ajc47]

Trash can stocks just took a dive.

 

They sure did. So did CF stock. Trash cans, how fitting for them.

[CoasterGuy06]

Q funding has filed a letter with the SEC where they accuse CF of lying about Jack Falfas resigning. It includes a letter from his attorney where Mr. Falfas says he was terminated and did not resign.

 

The letter can be found HERE.

[Bolliger&Mabillard]

[KI Kidd]

Cedar Fair has filed the presentation they intend to show at the Unitholder's meeting on January 11, 2011.

 

Cedar Fair Presentation

 

This is certainly shaping up to be a very interesting meeting.

[chadster]

^ Nice find and interesting read! Thanks!

 

Some high points I found in the presentation courtesy of KI Kidd: Note - a few words may have been changed or added to improve the entertainment value.

 

"Strong and distinctive brands known for high-quality, pristine parks with one trash can per 2 guests"

 

"Significant barriers to entry" just ask Wild West and Hard Rock

 

"Further reduce debt through the prudent use of excess cash flows" obtained by adding qbot

 

"Grow revenues by 10% to 14% by 2015 " the economy has spoken

 

"Q Investments has held FUN units for just one year" thinking they could dive in and make a quick buck

 

"It has already sued FUN three times" losers. Thanks to them we have to spend more profits in lawyers

 

"We believe Q Investments’ true intentions are to get in, make a quick profit and get out–with no regard for what’s best for long-term investors" no sh!t sherlock

 

"Proposal 2: to consider and vote upon a proposal from Q Investments to amend the Partnership Agreement to require the General Partner to make dividend distribution a higher priority than debt repayment and to take every action possible, including seeking necessary amendments to loan agreements, indentures and other documentation, to implement such distribution with the goal of returning to close to historical distribution levels based upon earnings" haven't they heard the economy sucks right now?

 

"Proposal 2: Favors Q Investments’ short-term hedge funds investors over the Company’s long-term investorsby preventing the Board from making prudent decisions with the Company’s capital" duh

 

"While there is no set policy regarding Executive Chairman, the Board believes the most effective leadership model for the Company at this time is for Dick Kinzel to continue as Chairman and CEO through his contract term ending January 2, 2012" hell no he won't go!

 

"Two directors designated by Q Investments recently joined the Board" what else do those greedy people want?

 

"Q Investments’ request to mandate change in the Company’s proven fiscal policy is an apparent effort to create more short-term cash flow at the expense of long-term value creation and sustainable growth, which we believe is not in the best interests of all unit holders" afterall you can only choke the chicken so long

 

"Cedar Fair is targeting a long-term capital structure that provides a low cost of capital, cushion against downside scenarios and ample liquidity to finance future growth and distributions" take that beeatch

 

"Four out of five equity research analysts recommend FUN with a “buy” rating" so buy Q's units up now!

 

"Cedar Fair’s Board Unanimously Recommend Unit holders Vote AGAINST the Proposals Submitted by Q Investments" what else would you expect us to do?

 

Other items of note:

 

"Text message offers when inside park" now we're talking!

 

"Market competitive renovations to existing hotels" movin' on up!

 

"Trademark new rides and attractions" except that water ride thingy that's been giving us hell

 

"Consideration of accommodations / resort development at other parks where appropriate " Disney watch out, here we come!

[ajc47]

This isn't going to end well.

[chadster]

Cedar Fair Attendance Increases in 2010

 

CEDAR FAIR ENTERTAINS A RECORD 22.8 MILLION GUESTS IN 2010

 

 

 

• Attendance Improves 7.8%, or 1.7 Million Visits, From 2009

 

 

• Stellar Year Attributed to Successful Value-Creating Growth Strategy Including Aggressive Marketing Efforts and Key Investments

 

SANDUSKY, OHIO, January 5, 2011 -- Cedar Fair (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, announced today that attendance at its 17 locations totaled 22.8 million guests in 2010, up 7.8%, or 1.7 million visits from the Company’s total attendance of 21.1 million in 2009.

 

“We saw strong gains in attendance in all regions throughout the year, including significant improvements in season pass visits and group sales, as our aggressive marketing efforts and investments in new attractions drew increasing numbers of guests to our parks,” said Dick Kinzel, chairman, president and chief executive officer. “Through these efforts, we have been able to leverage the growing popularity of our parks and successfully navigate through a very challenging economic period by continuing to offer guests a best-in-class experience.”

 

Attendance at Cedar Fair’s northern region parks, which include Cedar Point in Sandusky, Ohio and Canada’s Wonderland near Toronto, increased 3.7% to 12.7 million guests in 2010 compared with 12.2 million in 2009. The Company’s southern region parks entertained 4.8 million guests in 2010, up 17.9% from 4.1 million a year ago. Its western region parks hosted 5.3 million guests in 2010 versus 4.8 million guests in 2009, for an increase of 9.7%. Average in-park guest per capita spending in 2010 decreased approximately 1% from the prior year.

 

“The record attendance is the latest highlight of what has been an outstanding year for Cedar Fair,” Kinzel continued. “In July 2010, we completed the refinancing of our debt to create a capital structure with a stronger balance sheet and provide the flexibility to take advantage of further value-creating growth opportunities. In addition, under the new financing agreement, we were able to reinstate the cash distribution to unitholders in December 2010, after the distribution had been suspended for a year due to covenants within the prior credit agreement. As we look ahead to the 2011 season, we will continue to focus on adding value to the guest experience while maintaining our commitment to delivering excellent value to our unitholders, including growing the distribution.”

 

The Company plans to issue a news release and host a conference call with analysts on Tuesday, February 15, 2011, to discuss 2010 fourth-quarter and full-year earnings results. The Company’s 2010 year-end tax information will be processed and mailed to unitholders at the beginning of March 2011. The same tax information will be available to unitholders through the Investor Relations section of the Company’s corporate website (www.cedarfair.com) beginning February 28, 2011.

 

 

Cedar Fair Press Release

[larrygator]

As many people know Cedar Fair held a special vote amongst shareholders on January 11th. Below is the preliminary press release from Cedar Fair.

 

Cedar Fair Announces Preliminary Results of Special Meeting of Unitholders

-- Preliminary voting results indicate that unitholders approve proposal to separate chairman and chief executive officer roles

-- Based upon preliminary voting results, the outcome of the proposal to make cash distributions a higher priority than debt reduction is too close to call

 

Changes at Cedar Fair

SANDUSKY, Ohio, Jan. 11, 2011 /PRNewswire/ -- Cedar Fair Entertainment Company (NYSE:FUN - News), a leader in regional amusement parks, water parks and active entertainment, announced the preliminary voting results of today's Special Meeting of Unitholders to consider two amendments to the partnership agreement as proposed by Q Funding III, L.P. and Q4 Funding, L.P. ("Q Investments").

 

The Company stated that based upon the preliminary results unitholders voted in favor of Proposal #1, to separate the chairman and chief executive officer roles, and that the outcome of Proposal #2, to make the cash distributions to unitholders a higher priority than paying down the Company's debt, was too close to call. The Company reminded unitholders that the results are still preliminary and subject to verification by the independent inspector of elections. The Company will announce the official results of today's Special Meeting of Unitholders after verification of the results by the independent inspector of elections.

 

"We understand the concerns our unitholders have on Proposal #1 and intend to implement a policy in regard to the separation of the chairman and CEO roles in a prudent and appropriate manner. In regard to Proposal #2, we will evaluate and act accordingly once a final outcome of the vote has been determined," said Michael D. Kwiatkowski, Cedar Fair's lead independent director.

My opinions and votes: I agree that the Chairman and CEO roles needed to be separate. I don't know what the hell the board was thinking in trying to sell out to Apollo 13 months ago at $11.50, the stock is back to over $17.00. Q Investments does not have all the answers but they gave the board a big kick in the ass.

 

I also do not approve of a higher dividend distribution. Management is doing the right thing in paying down debt to avoid a situation like Six Flags went through. I think it is penny wise and pound foolish to demand higher stock dividends over a clean balance sheet. You might make a couple of dollar now, but the stock could be worthless down the road as interest grows.

Edited January 12, 2011 by larrygator

[KDCOASTERFAN]

^I agree.

 

Paying down the debt should be a top priority over trying to make a quick buck on the stock price because,as history has shown us with SFI their greed for quick cash is gonna come back to bite them in the a$$ & then there'll be no "quick cash" left for grabs & we the park going public will be the ones who ultimately suffer in the end when the parks fall into disrepair & CF goes the SF route by playing favorites with their cap ex spending.

[DJeXeL]

SANDUSKY -- Just days after a special shareholder meeting to revise the chairmanship role at Cedar Fair LP and put it on a course to pay higher dividends, the amusement park chain's largest shareholder is threatening to force more such meetings.

 

 

In a letter this week, Q Investments, which owns 18.1 percent of Cedar Fair shares, said it will demand another shareholder meeting should the company's directors fail to respond positively to a proposal requiring dividends to be a higher priority than debt repayment.

 

 

The dividends-versus-debt issue was one of two proposals voted upon Tuesday at a special meeting of shareholders in Huron, Ohio.

 

 

Voting results have not been released, but Cedar Fair said one proposal -- to separate the chairman and CEO roles, both of which are held now by Dick Kinzel -- passed and is expected to be addressed soon by the board.

 

 

The Sandusky amusement park company said the second proposal on the dividends priority was "too close to call" and the company would wait to see what happens. In its letter, Q Investments claims that, at last count, the second proposal got 49.4 percent of the voted shares but that it feared Cedar Fair would ignore the issue unless the final total was 50.1 percent.

 

 

"Please be advised here and now that should you decide to ignore this second proposal for the absurd reason of missing this last approximately 0.7%, we will call yet another special meeting to vote on exactly the same resolution -- this time our simple goal will be getting the vote count from 49.4% to 50.1%," Q Investments' letter stated.

 

 

Cedar Fair officials did not respond to calls seeking comment.

 

 

Q Investments also expressed displeasure with Cedar Fair's position that shareholders cannot nominate candidates to be directors on its board, but rather only vote on candidates that the board nominates.

 

 

That position was restated at the Tuesday meeting by Mr. Kinzel in response to a question on the issue.

 

 

The lead shareholder called on Cedar Fair's board to "abandon its silly position" that only the board can nominate directors, and said if the policy is not changed, "we will not hesitate to call a special meeting shortly to vote on this point. …"

 

 

-- Jon Chavez

[jedimaster1227]

http://www.cedarfair.com/ir/press_releases/index.cfm?current_root=15&mode=story&story_id=280

 

Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced the appointment of C. Thomas (“Tom”) Harvie as non-executive, independent chairman of the Board of Directors, effective immediately.

 

Harvie succeeds Dick Kinzel as the Company’s chairman. Kinzel voluntarily relinquished his chairman position in response to unitholders’ support of the proposal regarding the separation of the chairman and chief executive roles. Kinzel will remain as president and chief executive officer of Cedar Fair through the end of his contract on January 3, 2012. The proposal passed with approximately 54 percent of the vote at the Special Meeting of Unitholders, held on January 11, 2011, to consider two amendments to the partnership agreement as proposed by Q Funding III, L.P. and Q4 Funding, L.P. (“Q Investments”). Given the complexity of voting tabulation caused by the two distinct sets of proxy materials used in such special meetings, the results required a verification and reconciliation process by an independent inspector of elections.

 

Harvie, who has served as an independent director of Cedar Fair since 2008, chairs the corporate governance committee and the CEO succession planning committee. Most recently, Harvie served as senior vice president, general counsel and secretary for The Goodyear Tire & Rubber Company.

 

Harvie’s appointment is in line with the Board’s newly adopted policy, which requires the separation of the chairman and chief executive officer roles and states that the chairman of the Board will be independent of the Company.

 

Harvie commented, “We believe today’s actions will help ensure a smooth and seamless leadership transition for Cedar Fair as it enters a new era of growth and sustained value creation for its unitholders. The Board recognizes the valuable leadership that Dick Kinzel has provided the Company during his years of service as Chairman and CEO, and appreciates his continued commitment to the Company. I look forward to serving in this strategic leadership and governance role as we complete the CEO succession planning transition process and continue to build on the Company’s strong 2010 performance.” The appointment of the non-executive, independent chairman will be reviewed by the Board on a periodic basis.

 

As announced on December 6, 2010, the Board has retained Korn/Ferry International, one of the world’s leading executive recruiting firms, to assist in its ongoing CEO succession planning process, which is expected to be completed by the end of the second quarter of this year.

 

The Company also announced that Proposal #2, which called for the amendment to the partnership agreement to require the payment of cash distributions to unitholders as a higher priority than reducing leverage and strengthening the Company’s balance sheet for the future, failed to receive the requisite number of votes required for approval by unitholders. Three of the four leading proxy advisory firms recommended that unitholders vote against the proposal.

 

“The Board recognizes that unitholders have a vested and continuing interest in the payment of a sustainable and growing distribution,” said Kinzel. “The Company is – and always has been – deeply committed to the payment of a distribution to our unitholders. Consistent with that commitment, the Board has agreed to review the distribution strategy during the 2011 first quarter in combination with our 2010 full-year results. As part of that process, we will consider all options available under our current capital structure with respect to the payment of future distributions. As evidenced by the past 24 years the payment of a distribution is among the Board’s highest priorities.”

 

The Company today filed an 8K with the Securities and Exchange Commission which sets forth the detail of the final voting results, as certified by the independent inspector of elections. The filing can be accessed via the SEC website at http://www.sec.gov.

[OISU8P]

I wonder how that is going to go over with Q. I thought they wanted someone who has no previous ties with the company. This should be interesting.

[KDCOASTERFAN]

Good thing they rejected it in favor of paying down the debt....did anyone read the article today concerning a possible CF/SFI merger? I hope that doesn't happen.

[downunder]

^CF/SFI merger - that's wack.

 

Looks like Dick is limping off to retirement, if Q had their way he'd be sweeping the midway at Cedar Point this summer.

 

I'm glad too that they're focusing on paying down the debt.

[KI Kidd]

Had Q not stepped up and put an end to Apollo's aquisition of CF there are many who believe that we would all be reading about the CF/SFI merger. Q's reaction to today's events should give a little more insight on whether they are in it to make a quick buck or are looking to be a player at CF for the long haul.

[Bolliger&Mabillard]

I don't know how to take this lingering merger talk. If it were to happen I don't know if it'll make Six Flags better or Cedar Fair worse. I've been to a number of both parks and enjoy CF parks a litlle more, save for trashcans and seatbelts.