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Postby Sven18 on October 4th, 2019, 11:13 pm
B&MGuy35 wrote:
JackGlass wrote:They made the right move by rejecting this horrible offer.

Just looking at the comments on social media, everyone seemed to hate this idea. Six Flags has built up a bad reputation, as being cheap and stingy when it comes to investing and taking care of their parks. Cedar Fair has built up a great reputation.

If Six Flags took over Cedar Fair, the quality of those parks would almost certainly decline. If Cedar Fair took over Six Flags, the quality of the Six Flags parks, would almost certainly increase.

Six Flags needs to invest in the parks they have and clean up their image before they try taking over companies like Cedar Fair and Sea World Entertainment.

Everyone is missing the point. Part of the offer was to keep CF board members on running the company. So it would basically transform SF into a CF run company not the other way around since CF would have control over the company.

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The offer was $20 below what would make it appealing to shareholders and compensate them for huge benefits of MLP structure. 18% premium on stock price was ridiculous and just 12% above target price. Also, most of the deal being in SF stock is not appealing. SF stock is down huge in the last year. Not enticing to be offered SF stock. Having CF in exec positions doesn't cover for the low ball offer. Also, SF is struggling to have organic growth, CF is not only producing it, but has a bunch of new assets coming or just purchased that have massive upside potential. Schlitterbahn results are great already. The outdoor sports complex event bookings in year 2 what was projected for year 4 or 5 according to CF. Saw Mill Creek was the second biggest booker for the Outdoor sports complex after CP properties when bought. CF can expand that more and have the indoor sports complex coming which means more revenue off theme park season. The Carowinds hotel is opening in November and Wonderland hotel in early 2021. CF has no need to sell or merge and stated they aren't for sale. They however had to hear out any offer as a fiduciary responsibility to share holders, they could be sued otherwise. They couldn't turn down a great offer, say if it were $100 share or something without bringing it to shareholders to a vote, if a really big premium was offered.

The actually offer is being questioned by a few analysts b/c of the low per share price. There is some speculation SF might have another below expectation quarter coming again perpetuating the lack of organic growth narrative on Wall Street. This offer was a display they are trying to do something. There is also the notion that they are having trouble finding a CEO they want, hence let CF's management take over. The entire thing is odd b/c SF in many ways, ie...SF is pushing memberships as their new grand model the last 2 years. CF is wholly against memberships and in their analyst day presentation spent time explaining why they are against a membership structure. They think it hurts pricing power. So, SF in theory wanted a management team against the core of their new model started 2 years ago. A management team pushing the destination park, hotel/resort model for years and their 2 additions this year were in that area. This is an area SF is not really into beyond Darien Lakes(operating lease park). Great Adventure is the place a hotel could work. GAdv has no close by lodging and they have a lot of land. Other big parks like SFMM have plenty of nearby lodging and the park hasn't a bunch of extra suitable land/spots like GAdv

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Postby JackGlass on October 5th, 2019, 7:14 am
I think Great Adventure was originally supposed to build cabins, similar to Light House Point. This was part of the original plan for Great Adventure (Pre Six Flags)

Something like that would be awesome. Especially with all the wooded land that Great Adventure has.

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