Cedar Fair chief: Apollo deal will let me concentrate on running the parks

SANDUSKY Cedar Fair CEO Dick Kinzel says he's tired of having to concentrate on debt and finances.
Tom Jackson
Mar 7, 2010

SANDUSKY

Cedar Fair CEO Dick Kinzel says he's tired of having to concentrate on debt and finances.

He says he wants to renew his focus on running amusement parks.

Kinzel said the proposed $2.4 billion sale to Apollo Global Management offers a way out of the debt Cedar Fair took on when it acquired the Paramount amusement parks in 2006.

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Apollo's offer to acquire control of Cedar Fair by paying unitholders $11.50 per unit will let Kinzel concentrate on what he does best, the executive said.

"I'm an operations person. I'm not really a finance person," he said in an exclusive interview detailing how the deal came about.

The proxy statement Cedar Fair filed two weeks ago said an Apollo official contacted Kinzel in late September. Oct. 6, Apollo told Kinzel it was interested in buying Cedar Fair.

The encounter was at TGI Fridays, the restaurant at Cedar Fair's Castaway Bay water park in Sandusky.

"I had my usual round table in the corner," Kinzel said, referring to a table on the west side of the eatery. "We didn't know what they wanted to talk about."

Kinzel said he replied he'd have to take it up with Cedar Fair's board. The proxy says Kinzel took it to the board Oct. 7.

Although Kinzel and other Cedar Fair managers will be required to sell their Cedar Fair units, they will also be required to buy shares of Apollo common stock, the proxy statement says.

It's common for companies to require their managers to have a stake in the company's fate.

"They want us to have an investment in the company going forward," Kinzel said.

For several days, Cedar Fair's units have been trading above the $11.50 price Apollo offered. There has been speculation that some investors hope for a better offer.

Cedar Fair is in the middle of its "go-shop" period, which ends Jan. 25. During this time, Cedar Fair can seek offers from other companies. It will be interesting to see what happens to the unit prices after Jan. 25, Kinzel remarked.

Cedar Fair has not commented on whether other companies have shown interest, and Kinzel said he could not discuss the matter.

Copies of the proxy statement will be mailed out in February for unitholders to vote on the proposed acquisition. There are about 55 million outstanding units, and the merger must be approved by votes representing two-thirds of those units.

The Knott family, relatives and descendants of the man who founded the Knott's Berry Farm amusement park, hold about 2 million units.

Stephen Knott, a member of the family, said he still doesn't know how he will vote. He said he believes Apollo plans to buy Cedar Fair, hold it for several years, then sell it again.

"I can't speculate," Kinzel said.

"They haven't discussed that with me at all," he added, referring to executives at Apollo.

Kinzel said he's known the Knotts since 1997, when they sold the amusement park to Cedar Fair. He said he talked to Steven Knott on Monday.

"We weren't able to talk to them 'til the proxy came out," Kinzel said.