What's new

Six Flags Offers Bid to Purchase Cedar Fair

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
Details are scarce, but rumor mill is churning today: https://www.reuters.com/article/us-...d-to-acquire-cedar-fair-sources-idUSKBN1WH1ZA

(Reuters) - U.S. theme park operator Six Flags Entertainment Corp (SIX.N) has approached peer Cedar Fair LP (FUN.N) with an acquisition offer, people familiar with the matter said on Wednesday.

Cedar Fair is considering Six Flags’ cash-and-stock offer, and there is no certainty that a deal will be reached, the sources said. Details of the offer could not be learned.

The sources asked not to be identified because the matter is confidential. The companies did not immediately respond to requests for comment.
 

Thekingin64

Strata Poster
Interesting news. Like @Matthew Fair is asking, Surely some sort of competition regulator should be stepping in here to prevent the monopoly? Would be interesting to see the results though if it goes through.

I know Merlin slipped through that net here and that there are likely separate rules/laws in the US surrounding this but believe the Sainsburys/Asda merger over here was stopped was stopped by the regulators on preventing monopoly grounds.
 

SilverArrow

Giga Poster
Maybe if they bought just Michigan's Adventure and Dorney they'd finally get new creds. Feel like Cedar Fair don't really care for those parks much anyway!

Joking aside, as everyone else has said, this sounds like a bad idea.
 

Hyde

I Lied About My Age!
Staff member
Moderator
Social Media Team
Interesting news. Like @Matthew Fair is asking, Surely some sort of competition regulator should be stepping in here to prevent the monopoly? Would be interesting to see the results though if it goes through.

I know Merlin slipped through that net here and that there are likely separate rules/laws in the US surrounding this but believe the Sainsburys/Asda merger over here was stopped was stopped by the regulators on preventing monopoly grounds.
The U.S. has a Federal Trade Commission which oversees mergers to break up monopolies: a Cedar Fair and Six Flags merger wouldn't really flag on their radar however, when you consider Knott's Berry Farm, the most attended park of the two park chains, only ranks at #12 overall in U.S. park attendance behind Disney and Universal parks. Cedar Fair and Six Flags are large, but no so large as to threaten market competition, so long as Universal and Disney are around.

To unpack this a little more however, this 100% is no happening. Six Flags is proposing the buy out Cedar Fair's park assets and stocks. Six Flags is only valued a little ahead of Cedar Fair, $4.3B and $3.3B respectively. So Six Flags would have to muster a VERY large sum for the buyout, while also persuading Cedar Fair shareholders that selling of their stock for cash is a good idea at this point in the market. Cedar Fair stock has taken a bit of a hit in the last few years, but remains steady; still not convinced some of the larger shareholders would be keen for a selloff at this point.

This is also to not take into account that both park chains are quite different in their management and approach. You'd also be introducing some overlapping competition in key markets, which is equally unideal and results in a downward spiral of poaching business from oneself.

It's a fascinating proposition; if I were Six Flags, I'd be more interested in trying to acquire smaller park counts like Busch or some of the Parque Reunidos properties.
 

davidm

Strata Poster
^ they borrow shed-loads of money from banks on the promise that they can make enough cost-savings / profits in the bigger group to service the loans.

Really hope this doesn't happen.
 

Jcoasters

Mega Poster
I hope so for the sake of my Diamond Elite membership.

My worry is Six Flag's recent lack of investment, all Gigas are Cedar Fair for example. However, with some of the renderings for the Chinese Park(s) and that 500 foot plus in Dubai, we could see a change.
 

oriolat2

Giga Poster
Is it April 1st yet?

Of all the case scenarios this is the last one I could picture. If anything, I think Cedar Fair could potentially buy Six Flags. After all, wasn't once Six Flags on the verge of bankrupcy because they tried to bite more than they could chew?

Plus, as others have mentioned. Having parks in close competition owned by the same company leads to stagnation and lack of investments. I know what I am talking about: ever since Parques Reunidos took over Parque Warner, PR has had two parks in Madrid and overall quality and investments have gone downhill.

Hopefully this is just a rumour.
 

Antinos

Slut for Spinners
Wowza. I went to lunch with a buddy of mine today and when I got back I couldn't believe this headline was actually in existence.

What I find interesting is that virtually every industry in the US is battening down the hatches for a pretty significant recession and yet all of the major park chains are in buy and spend mode. In addition to this alleged move, Six Flags also reacquired Darien Lake and Frontier City, and also acquired three water parks. Cedar Fair purchased Schlitterbahn as well as that resort in Sandusky. Sea World Parks are making it rain on new attractions. Disney continues to Disney and Universal continues to Universal. It's an interesting trend to see, considering that my perspective on things isn't really business oriented.
 

Jcoasters

Mega Poster
If I'm to be correct, during the last recession, spending on theme parks and stuff didn't really go down. I think people see it as a cheaper alternative to travelling. Everyone loves a nice theme park.

Besides, the people need dark Netflix shows, theme parks, and fast food to keep them pre-occupied while the society is 'advanced' into the end times by the most fooled.

And it's a nice lake to be in I'm sure, I don't know why they ever sold it.
 
Top