There are now a total of seven lawsuits challenging the purchase deal Cedar Fair struck with Apollo Global Management.
The latest lawsuit was filed Tuesday afternoon by Israel Friedman of New York.
Two other lawsuits have trickled into the Erie County Common Pleas Court on behalf of Paul Gillin of Michigan and Pat Herring of Pennsylvania.
Each lawsuit claims the offer price of $11.50 per limited partnership unit unfairly minimizes the value and profits the unitholders are looking for.
The same complaint was made in the other four lawsuits filed earlier this month by Sandusky residents Mary Denslow and John Sprau, Todd Miller of Indiana, Kenneth Loiselle of Connecticut and Joseph Braun of Milford, Ohio.
Herring, who owns 561 units, said she would like for the sale to be stopped if unitholders are only going to get $11.50 per unit. She believes Cedar Fair is a good company, and the unit price will eventually go up.
"I feel the unitholders shouldn't be treated this way," the 73-year-old said. "We didn't get any warning they were going to do this."
Stacy Frole, director of investor relations for Cedar Fair, declined comment on the additional lawsuits.
The Herring lawsuit argues instead of acting in the best interests of the unitholders, Cedar Fair leaders used the recent downturn to meet the needs of the sale instead of reflecting the true overall financial performance of the company.
"I don't think these parks are going to go out of style," Herring said.
Cedar Fair previously said the managers and board of directors considered options and decided the deal was a good one for unitholders.
The Dec. 16 deal has been valued at $2.4 billion, including $1.6 billion in debt. Unitholders will get the chance to vote on the deal and Cedar Fair must win at least two-thirds of the votes for the sale to go through. There are about 55.2 million units and thus votes. This brings relief to Herring.
"I guess we have to give approval but I'm worried the company (will sell at lower unit price)," Herring said.
Josh Kosman, author of a new book on private equity firms called "The Buyout of America," said most shareholder suits are settled for a relatively small amount of money and the deals go through.
Kosman's book says there is evidence that in general, private equity companies tend to pay less when acquiring companies than publicly-traded companies do.
A private equity expert in Washington, D.C., said the Cedar Fair lawsuits are similar to other lawsuits filed by shareholders who believe management is leaving money on the table.
"The problem is, absent a better offer, who is to say?" he said.
Under the agreement signed by Cedar Fair and Apollo, the amusement park company has time to listen to other offers. That "go-shop" period ends Jan. 26.
Here's what commenters had to say:
LetsBeHonest wrote on Jan 1, 2010 5:07 PM:
" Its bigger than you think. Legal papers filed Dec. 9th by Cedar Fair, the parent company of Santa Clara’s Great America amusement park, could derails plans by the San Francisco 49ers to re-locate. The team is completely focused on the plan to build a 68,500-seat stadium adjacent to the Great America park. Apollo Global is looking at the city of Santa Clara's plans of subsidizing a $937 million stadium next door.
Then there is CalPERS (California Public Employees’ Retirement System), it has lost about $420 million in its investment in Apollo Global with CalPERS $600 million investment recently valued at $180. "
hancrack me up wrote on Jan 1, 2010 12:55 PM:
" The next back door deal will be moving the entire operation far away from this sub-generic town. Maybe if there was more to do in the actual town, CP could leave their shops & indoor entertainment open year round...oh, but wait...look at the dud-ish land that surrounds the peninsula. 1955dudski will never change. There is no room for progress here, so it'll be a field day for media when they start disassembling the coasters for the big move. "
ou812 wrote on Jan 1, 2010 11:22 AM:
" Instead of scamming unit holders, how about offering unit holders equal shares of stock in the new company?
If only Kinzel would have asked for my advice he wouldn't have taken a bath on the sale of his shares. Oh wait, he was given the shares and an exorbitant bonus/salary all theses years so he's out nothing financially while the pee-on unit holders get peanuts.
As for Chongo::: Spoken like a true higher-up at Cedar Fair "
Taxpayer wrote on Dec 31, 2009 3:41 PM:
" They will never reach an agreement to sell Cedar Fair to Apollo with all this legal litigation. Everyone wants their cut. Because of all these lawsuits being tied up in court, it will take YEARS. It is difficult enough to have a jury trial at the court house for criminal cases let alone set up the docket for civil suits. What a mess. This summer will be safe and the park will still operate. At least there will be an influx of attorneys staying at the hotels in Perkins Twp. to help with the depressed economy. "
6079 Smith W wrote on Dec 31, 2009 6:57 AM:
" Pure and simple: Attorneys smell money; parasites gotta eat too ya know?
Wait to see if any other potential buyers come out of the woodwork; I kinda doubt it though.
Cedar Fair (FUN) stock has been a dog for yrs. The slashing and then the suspension of the div’d should have been a warning for even the most clueless stockholder that the co. was in trouble.
CF needs a serious cash infusion and short of a bank line of credit that is hard to come by these days, AGM is the co’s. lifeline out of potential bankruptcy.
IMO, if I were a direct unitholder, I’d take the money and run.
Discloser: I own (FUN) in mutual funds and therefore own it indirectly. "
Darkhorse wrote on Dec 31, 2009 5:32 AM:
" Why didn't Cedar Point publically come out and say that the company was up for sale right from the start? Instead, they do a back door deal with Appollo and the shareholders never knew it was up for sale so then Cedar Point tells everyone it is up for sale after they made a deal with Appollo. "
Joker wrote on Dec 31, 2009 2:48 AM:
" So far, Sandusky Register, you have identified the number of limited partner units owned by exactly ONE of the seven plaintiffs. Stop trying to sensationalize this sale. If all of the plaintiffs own the same amount of shares as Ms. Herring, that is still only seven THOUSANDNTHS OF ONE PERCENT of the total outstanding shares. "
chongo wrote on Dec 31, 2009 2:23 AM:
" I find this very funny because the unit price has hovered around 9 bucks for some time now. only to shoot up to 11 and change when the sale was anounced.. going to go up?, I have but two questions for these people. one, have they been to any of the parks latley, and second, have they seen the parks latley? yea, it was around 9 bucks for a reason. take the 11and change and be happy, it was going to take a long long long long time to get back to the 30's a share.. "