Cedar Fair purchase is hardly a done deal

SANDUSKY The old adage "it ain't over 'til the fat lady sings' might apply t
Tom Jackson
Mar 8, 2010


The old adage “it ain’t over ’til the fat lady sings” might apply to the proposed deal to sell Cedar Point’s parent company, Cedar Fair.

Apollo Global Management’s $2.4 billion purchase of Cedar Fair requires approval from the owners of at least two-thirds of Cedar Fair’s outstanding units. The people who own the units must be persuaded that the $11.50 per unit offer is a good deal.

But Cedar Fair executives and Apollo managers have not persuaded analyst Jeffrey Thomison of Hilliard Lyons, a financial consulting firm in Louisville, Ky. He’s not convinced they can reach the two-thirds threshold to make the deal go through.

Thomison wrote a report saying the deal price “seems a bit low” given the company’s earnings history and its “bright” long-term outlook. He predicted if Cedar Fair remained an independent company, rising cash flows and declining debt would lead to a unit price in the upper teens in 2011.

There is a “slight chance of a higher offer surfacing in the next month or so,” Thomison wrote, so it should not be “a foregone conclusion, in our view,” that there will be enough support from the unitholders.

The agreement with Apollo allows Cedar Fair to listen to other offers for 40 days.

Randy Hunt, branch manager and senior vice president with Stifel Nicolaus & Co. in Sandusky, said Dec. 18 he’s gotten an earful from many unitholders and the reaction has been largely negative. He said he’s heard from dozens of people, and “most are unhappy.”

“I would say it’s a solid majority,” he said. “I’ve got a stack of messages on my desk already this morning to call people back.”

“They feel it’s a very low price. I believe most of them will vote against it,” Hunt said.

Cedar Fair’s board voted unanimously to approve the merger, and CEO Dick Kinzel and his executive team strongly back the deal.

The $11.50 price is a 28 percent premium over the closing price on Tuesday, the company noted in its Dec. 16 news release announcing the deal, and a 43 percent premium over the weighted average closing price during the past 30 days.

“We have concluded that the transaction with Apollo is in the best interest of our unitholders,” Kinzel said.

He said unitholders will receive documents in the mail explaining why Cedar Fair believes it struck a good deal with Apollo.

The executives recommending the deal, however, don’t hold enough units to guarantee a positive outcome on the vote. As of Jan. 31, 2009, the board of directors and the 15 executive officers held about 4.4 percent of the outstanding units.

“That percentage typically is not going to fluctuate very much,” said Stacy Frole, director of investor relations for Cedar Fair.

Sandusky resident Susanne Scheid owns many units of Cedar Fair. She said she plans to vote against the deal.

“I don’t think they should give up now because the economy’s bad,” Scheid said. “I think they shouldn’t sell to Apollo ... We don’t need some outsider telling us what to do.”

Levi & Konsinsky, a New York City law firm specializing in securities litigation, said on its Web site it is investigating possible litigation on behalf of unitholders.

“The investigation concerns whether the Cedar Fair board of directors breached their fiduciary duties to Cedar Fair shareholders given that the Company’s shares traded at $12 per share as recently as Aug. 3, 2009, and at least one analyst set a price target for Cedar Fair stock at $15 per share,” the firm said in a statement.

Dennis Speigel, president of International Theme Park Services of Cincinnati, a theme park consulting company, said it appears Apollo got an excellent price for Cedar Fair. He said he expects Cedar Fair to continue to do well.

“Our industry during 2008 and 2009 has shown as a business, and as an industry, it’s very resilient,” Speigel said. “It’s not recession proof, but it’s recession resilient.”

Here's what commenters had to say: 

Quicksand wrote on Dec 21, 2009 5:26 PM:

" To Browndog271: are you saying Kinzel sold some of his stock or borrowed against it? If he borrowed against it, then wouldn't that make his vote on those shares void? I sold all of mine 2 summers ago so I can't vote, but I would vote no. Not that I am against developement in Sandusky, but it would be nice to keep CP a local amusement park instead of a Casino--especially if they decide to break away from the city, which I think is possible and a likely probability if they do put in a Casino. I know the casinos were not approved for our city, but how long do you think it would be before it is? 2-3 years max? They could build a large condo/hotel building now and in 2-3 years it would be already be ready for the gambling. I've heard for years that Sortinos and CP is already wired and waiting! Don't know if it's true, but I'm sure you've all heard that rumor. The only real beef I've ever had with CP being in my backyard is the price gouging in the summer (and at holidays, like now!) and the traffic. They should give residents a 25% discount everywhere and a special lane to drive in (like the carpool lanes in CA.) And special seating in restarants and our own checkouts lanes! I don't think that's asking for too much! I get sick of hearing what all CP has done for this city and this area and for us! I do not see anything they have done for ME! Unless you own a business on 250 or a hotel, how have you benefited personally? If this city had not catered to them like they did for 35 years, it would be in a lot better shape. They thought they had the goose that laid the golden egg! Well, the goose is dying now, so now what? Better get them tollgates up quick! "

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whocares wrote on Dec 21, 2009 1:49 PM:

" Kinzel can't retire! Where will his kids work? "

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Joker wrote on Dec 21, 2009 1:41 PM:

" Where were all of you Adam Smiths three years ago? Probably buying 52" flat screen TVs on credit that you're still paying off. "

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Browndog271 wrote on Dec 21, 2009 11:04 AM:

" here is an add on, Kinzel had to sell shares to cover a margin call, ie borrowed $ against his stock at a brokerage firm. If he cannot manage his own finances, how can he managed FUN, it is obvious "

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Browndog271 wrote on Dec 21, 2009 10:49 AM:

" The deal is way to low, my guess is that the fat cats are getting a great payout to sell off the park, unit holders get the short end of the stick, kinzel porked up the board with hs friends and that is why they rolled over to do the deal and of course keeps him on even though there was a mandatory retirement age, they waived it for him, then he made the horrid decision to over pay for paramount parks, just like Nero, watched Rome burn. Bring back Don Miears or Gaspar Lococo, they knew how to run parks "

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factitious wrote on Dec 21, 2009 10:11 AM:

" Any way you look at it, 5 years, 1 year, 6 months, FUN has seriously underperformed the Dow -- until mid November. What made it look so good then? The news of a probably dividend cut? Or was this just recovery from the 2-1/2 point drop after the recent quarterly report? "

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vector wrote on Dec 21, 2009 10:06 AM:

" same debt (plus transaction fees)

new equity (Apollo) "

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Here in Ohio wrote on Dec 21, 2009 8:43 AM:

" bankruptcy = 00.00 bucks, dont let the GREED bug get the better of you all,you just may end up with NOTHING,vote YES take the money and run !! "

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vector wrote on Dec 21, 2009 8:11 AM:

" 1.historic regional depression

2.paralyzed banking environment

3.very competent OPERATING management

4.underlying value untapped

5.time to sell....I think not

apollo----shrewd "

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6079 Smith W wrote on Dec 21, 2009 7:59 AM:

" I own shares of (FUN) indirectly through mutual funds and therefore have a say in the matter.

IMO, the fact that the div'd was suspended earlier this yr. should have been 'handwriting on the wall' for only but the clueless.

Wasn't it 2006 when Cedar Fair purchased the other parks and took on the debt? Remember 2006? Credit was flowing, lending was loose and interest rates were low. Anyone familiar with the term – ‘The Great Moderation'?

Many business decisions are made in the midst of a credit bubble that in hindsight are later found to be imprudent. Monday morning quarterbacking is for those who never take the field.

Now commercial credit is tight to nonexistent. Cedar Fair is a capital intensive business and needs a line of credit in order to survive as a viable business – without it, it dies.

If you know how to read financials, (I’m not an expert, but I know enough) look at Cedar Fair’s annual report – they’re in trouble!

They need a capital infusion and Apollo is their lifeline.

For the love of Mike, Six Flags declared bankruptcy earlier this yr. and have yet to emerge.

Equity holders are at the bottom of the food chain in a bankruptcy and tend to end up with zero.

With a shareholder lawsuit, technically you’re only suing yourself and the only ones who actually make any money are the lawyers.

If I owned shares directly, I would take the money and run. "

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middleclass wrote on Dec 21, 2009 7:29 AM:

" I am at the bottom of the barrel as far as holders of FUN shares go but I will be voting no. "

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William Jefferson Clinton wrote on Dec 21, 2009 7:08 AM:

" Litigation over Breach of Fiduciary Duty will most likely not be successful as the board has simply been foolish, not negligent to this point. The Paramount deal tought a lesson that second rate amusement parks will lose. We already know locally how second rate water parks fair as well.

Apollo understands this and is best suited to lead to the devlopment of a first rate Casino incorporated with a first rate amusement park. It is simply a good business decision and wil increase profit and provide a steady stream of off-season income that far, far excedes any water park.

Part of the determining factor of what price to sell needs to look at the potential value to other investors and what the end result could be. This is a low ball deal, and unit holders should hold off until we're in the $18 range. "

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Grayghost wrote on Dec 21, 2009 6:16 AM:

" It appears something is not quite right. How can Cedar Point get themselves into so much debt and not understand how much debt they were acquiring by buying up every park around. It doesn't sound smart or make any sense. Does anyone know what the stock topped off when it was doing great? I think the SEC should be looking into why they took on so much debt and then turned around and dumped their stockholders at a loss to a company that has a casino background. "

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Joker wrote on Dec 21, 2009 3:30 AM:

" In this economy, people are going to cash the (expletive) out. Lots of the unit holders bought shares when they were $10 a pop. They got paid fat dividends for 20 years and the stock split, so $11.50 is a great deal. I guarantee D!ck Kinzel and his hundreds of thousands of shares are going to vote yes. Also consider how many people will simply allow their votes to go to a proxy bidder who will more than likely vote 'yes.' "

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Fall out boy writes crap music


Well first I must say I am impressed that you're 15 and know the lyrics to "The Pros & Cons of Breathing" instead of the new Fall Out Boy stuff, this is music actually worth listening to. =]

Also, I give you props because I'm 20 and also a writer. I am actually just starting my first novel (of many to come, I hope). I also plan to open up a new & used bookstore in our area in a couple of years. You seem like one of the young people I would actually see in the store. =]

Also, don't worry about what people will say on here. Like your friend told you, you can't please everyone. I get the meanest comments on here just by leaving a comment. They attack my personality, my age, and even my character which they have no idea about me other than a few typed paragraphs they read online. The worst part is that they don't have to sign their name. I am one of the few on here who almost always use their name as their screen name. The only time I don't is in a reply to someone else.

Well with that said, I look forward to reading your blogs. Can't wait. Good luck!


Michelle, nice first column. It's the obligatory, "this is how I got this webspace story..." Now you actually have to write something. :( If you want to close the gap between generations here, answer me this: What's up with that music? It's more a confusing ode to a dysfunctional relationship than an example of the power of the written/spoken word. (By the way: everybody is watching how you handle the haters, so don't dissapoint us. Do it with finesse to impress.)


I am looking forward to your writings.
It is good to see young people such as yourself express themselves. The young people of today will become the leaders of tomorrow.

I like your quote: "To change tomorrow, we have to have the vision today." It certainly appears to be an original quote. That quote will now be attributed to you. I have a feeling that you will one day be a very famous person. :)


Although I don't currently work as a journalist, that's the focus of my education as well as the content of my first full time jobs. Based on my own education and experience, I have just two things to say to Michelle:

1. Your column is quite well written. I'm more than a little thankful to see that at least one high school student somewhere still speaks and writes English both properly and with flair!

2. I don't see that Matt Westerhold is typically attacked on these blogs because people merely disagree with his opinion. The attacks appear to be overwhelmingly in response to some "news" story that's been published. I put the word "news" in quotes because, as you I hope you know, Michelle, "news" and "opinions" are two very different things. In my experience, The Sandusky Register has much confused the two in recent years by reporting scandals instead of serious stories, and by exacerbating serious stories into scandals by one-sided speculation all under the byline of "news." Many of Mr. Westerhold's own editorial columns are in defense of one such story or another, which is in and of itself more than a little telling.

When I went to school (and it wasn't so very long ago!), the difference between reporting and editorial commentary was made clear to us, and the ethics of confusing the two was emphasized. Here's hoping that a student as well spoken as you obviously are will help to return us to the days of integrity and responsibility in news by sharing your opinions with the understanding that some may disagree and that most will do so with some grace.

I trust you won't forget that facts, on the other hand, should be neither selectively reported to slant stories, nor should they be utterly ignored. If you don't fall into that trap, I doubt that the kind of attacks on your friend, Mr. Westerhold, won't be visited on you.

Best of luck in your new ventures, and again, you've made an impressive beginning!



You appear to be a very insightful writer and I enjoyed your article (Blog). I am a former subscriber to the Sandusky Register and feel that you could easily replace your friend Matt Westerhold. I would even entertain re subscribing to the register, if they were intelligent enough to replace Matt with a 15 year old. Good Luck Michelle and I hope the very best for your future.


Good Job Chelle! I am very proud of you! Good things come in many disguises.


Well I havent blogged in a while, but I have to say that the post from this 15 year old girl seems to be more well thought out and much more well spoken than Matt's ever been. My only problem is that she is claiming Matt to be her "Mentor" that is scary!!!! This man is not a journalist, but a person who was given the power to express his "Opinion" in a newspaper that is supposed to be unbias. The only advice I can give to Michelle, is that she take everything Matt has ever done and thow it in the garbage. He makes his living bashing our city leaders and standing behind a woman whom he doesnt really know. I am sure he loves to read the kind words expressed by this young girl who somehow sees him as a "legitiment" editor. Maybe in dealing with him and continuing to follow his work, she will learn what NOT to do to gain the admiration of future writers.....


Register alienates every reader they have and then tries to save the operation by letting a 15 year old write for them. Nice try Matt but......you still stink and so does the current format of the Register.


Best advice I can give you Michelle is to stay away from the political arena. It can get nasty and you are way too young and inexperienced to take it on. If you get into this area of news, it will turn you off from becoming a reporter or you will just plain get cold feet and have second thoughts about a career in reporting.


Michelle run! You don't want to learn from someone that also has trouble with the truth. He is already trying to turn Jennifer to the dark side. Use the force and run!



I would like to give you some insight on your question, even though you already know the answer.

It has been my experience through running the The Hero Zone and the Gamers Lounge that everyone has influence on changing the world in little ways everday.

It has been my experience of living for fourt-two years that the more people you connect to, the more influence you have in making a difference and change the world.

History is littered with people who have changed the world. As a writter, you will also have a major effect. So push forward with your barrel filled with ink, and enjoy the effects that you make.


Geez Matt, no Nuesse article? I'm shocked!


Matt has stopped because he sees that his ship is about to sink. He has let this bright young girl write an article to try and steer us away from the fact that he has alienated everyone in this city, problem is the Nuesse thing is not his only "mistake". How do all you concealed carry permit holders like having your names plastered in this joke of a newspaper?? That was Westerhold....Matt is going to soon wear out his welcome here and I think someone should start a petition to have him fired and maybe have the "ministers" in this city to investigate HIM. Matt is such a joke and I hope and pray that this young girl does not look to him for advice on.......well, anything...


bye bye kimmie


Was there anything shameless about breaking the law and invading the privacy of CHL holders? IS there anything credible about reading a misinformed love note from someone who's sole claim to fame is...wait for it...a blog? What's more likely to make you famous, writing well (a skill at which scant few succeed, much less excel) or cranking out your unsolicited opinion in a blog (something that everyone and his mother already does)?


I Hope this is a joke, because this girl's an idiot


Changing the world is a rather overwhelming task! People should forget about changing the world, and focus on changing themselves(at least you have some say in that!). Guess what will happen? Also, change is often imperceivable. But that doesn't mean it isn't not happening.


Forget about Fall Out Boy. They have a record contract, and their goal is to sell records and make money. Read. Experience. Think. Question everything.
The 1960's could have changed the world. But it just became the start of big business preying on the youth of our country, through style, and music, and ultimately television. DON'T WATCH MTV. They are run by swine who want to control what you think, and how you consume.


I'm just thinking....out of all the intelligent and experienced people in Sandusky, why was a 15 year old given a blog? What experience does she have - other than buttering up to Matt, apparently. At 15? Come on. We all wanted to change the world at 15. And if you want to change the world, please don't use fall out boy to do it.


Like I said... we (the young people of this world) are the future. You're not. Obviously you're just jealous of her.

Keep on going Michelle, you're going to be amazing!

just me

Ariel, it's people like you that make me dread the future. Smart mouthed, "I'm it - you're not" mentality.


...is that baby she got cookin' inside her!


You can NEVER have all of the answers, especially when you don't even have all of the questions.


good luck prove all the idiots of this world wrong you can do anything you want lol


Go Chelle give me a call sometime. luv ya like a sister