Glitch99 wrote:BrianH1970 wrote:https://seekingalpha.com/news/3504029-cedar-fair-turns-away-six-flags
Well that's that. I guess it was more than a rumor but you could make the argument for stock manipulation.
A 20-25% premium over the current share price is a legit, solid offer. Just not solid enough. Manipulation would only occur if the offer was a pipe dream that SIX could never afford, but there's no question they could've closed this deal if it had been accepted.
It was a low offer given the financials of Cedar Fair, asset portfolio, especially the new acquisitions this year, and those coming online with the new sports complex and 2 hotels,etc.... Cedar Fair is on the verge of a big growth period as the new endeavours mature. Then there is the tax benefit considerations of MLP's to shareholders. that must be considered for them to approve a deal. Around $90/share was the premium calculated by several analysts the last few days...$70 per share which amounted to $4B was not a good offer. CF price was $58 before the offer so they were offering just a 18% premium. Also the 1yr target is $62 so $70 is just 12% over what expected of CF in the next year in price. SF was acting if CF was desperate and in financial trouble. This was hardly a serious offer. Several analysts have questioned the timing. the quarter just ended and SF might know they are going to have a disappointing number, something they can't afford since they are already down 25% in the last year. This offer might just be SF trying to indicate they are trying to do something. 18% premium to the stock price with a stock offering 7% dividend is a low ball offer.
When Cedar Fair was nearly sold to Apollo back in 2009 they offered a 27% premium and that was when CF wasvin bad shape, leveraged to the hilt.
