Cedar Fair’s biggest investor wants big changes at the amusement park giant.
Q Funding, a Texas investment firm controlled by Dallas-area banker Geoffrey Raynor, is demanding a special meeting of unitholders to consider two proposals Q Funding is offering.
Dissatisfied with Cedar Fair’s recently announced 25-cents-per-unit cash distribution scheduled for December, Q Funding is asking for an increase in distributions.
Q Funding said the increase should be a bigger priority than paying down Cedar Fair’s debt, a priority the current Cedar Fair board has set.
In addition, Q Funding wants to “separate the roles of chief executive officer and chairman of the board,” according to a filing Q Funding submitted to the U.S. Securities and Exchange Commission.
The company said Cedar Fair’s chairman should be an independent director who hasn’t previously served as an officer for Cedar Fair or its affiliates.
For years Cedar Fair’s president, CEO and chairman of the board has been one person: Sandusky resident Dick Kinzel, 70.
Cedar Fair leaders are surprised and disappointed that Q Funding didn’t approach Cedar Fair first before filing the SEC statement, said Stacy Frole, Cedar Fair spokeswoman.
“We were surprised to learn of Q Funding’s recent filing, as we have not received a request for the special meeting of unitholders referenced in their filing,” Frole said. “We are disappointed that they have chosen to take this route rather than discuss their position with us directly, particularly given the positive momentum we continue to build for the company.”
Frole issued the statement Friday evening.
“Once we receive Q Funding’s request, we will notify all of our unitholders and, at that time, we will provide information on the process by which this request will be addressed,” she said.
Q Funding said it’s exercising its right to call a special meeting of unitholders to push its proposals.
Ultimately, the company wants a new chairman for Cedar Fair, as well as a hike in cash distributions.
Q Funding owns 18.1 percent of Cedar Fair’s outstanding shares, the SEC filing states.
By calling for a special meeting, Q Funding is relying on Cedar Fair’s bylaws, which say any unitholder with 10 percent or more of Cedar Fair’s outstanding units can call for a special meeting, a company spokesman said.
Q Funding has been an important player in Cedar Fair’s major decisions ever since 2009, when Kinzel and Cedar Fair board members tried to sell the publicly traded company to Apollo Global Management, a private firm based in New York.
Kinzel and the board sought $11.50 per unit. Had the sale been successful, Cedar Fair would now be a private company.
The effort eventually fell flat.
Still, Q Funding led the opposition to the move, arguing that the sale price was too low.
The new SEC filing alludes to that drama, noting that the “ill-fated decision” to sell to Apollo indicates it’s now time for “necessary change.”
This year, Q Funding led an effort to place two new members on Cedar Fair’s board.
Q Funding said it’s filing preliminary proxy materials with the SEC to begin its campaign for the two changes it’s seeking.
READ Q FUNDING'S FILING WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION BY CLICKING ON THE PDF BELOW.