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BLOG: NY Times 'Deal Professor' raps Cedar Fair

Tom Jackson • Jan 5, 2011 at 3:47 PM

Steven M. Davidoff writes the "Deal Professor" blog for the New York

Times. I interviewed him when I was writing about Apollo Global

Management's proposed acquisition of Cedar Fair.

Davidoff has penned an end of the year blog post on "The Deal Makers

Who Deserve Failing Grades," awarding grades of "F" to several

companies, including Cedar Fair.

Under the heading "Shareholder Rights," Davidoff writes,

"Cedar Fair failed hands down. After missing earnings estimates and

suspending its dividend, Cedar Fair, an amusement park operator,

announced a $2.4 billion sale in December 2009 to the private equity

firm Apollo Global Management. Cedar Fair is based in Sandusky, Ohio,

and has a large local shareholder base.

"These shareholders formed a core group protesting the low price and

management’s participation in the buyout. Cedar Fair responded by

stonewalling its shareholders and postponing a vote on the deal at the

last minute. Shareholders then held their own tea party revolt,

convening an alternative shareholder meeting.

"The sale was canceled, Cedar Fair’s chief executive announced his

retirement, and Cedar Fair is still grappling with a hedge fund

activist shareholder. Deal makers should remember that shareholders do

not react kindly when management tries to manipulate the sale process,

especially when they can see management in the local coffee shop."

I should point out here that the meeting Davidoff refers to was

postponed "at the last minute" by Apollo Global Management, which

under the merger agreement with Cedar Fair had the right to request

the delay.

In a follow-up post, where he awards "A" grades, Dadidoff gives his top award to shareholders of another company, but gives an honorable mention to Cedar Fair shareholders for "resisting low premium takeovers agreed by target boards."

Meanwhile, the Cedar Fair board's latest attack on Q Investments is here.

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