Electerik wrote:So...this company just buys other companies? And then...runs them? That's their whole purpose as a company?
Private equity firms, in theory, can have an advantage in that they don't have to run everything to look good for stockholders. In other words, they can try more long term strategies and not have to worry about Wall Street punishing them for a bad quarter or two.
From the WSJ article:
Apollo, which trades on a private exchange operated by Goldman Sachs Group, is expected to begin trading on the New York Stock Exchange early next year.
Of course this deal is all dependent on shareholder approval. Assuming the information in the article is correct, 700 million would be about 12.67 per share. Less than the 52 week high and far less than what it was way back in 2007 (and about half what I paid for it).
And I hate to break it to all you people ready to kick Kinzel to the curb: new owners doesn't necessarily mean new management. This isn't a hostile takeover so part of the negotation may involve certain people getting new positions with Apollo. And since Apollo doesn't have any park experience, it would make since to keep the old management team in place.
EDIT: Almost forgot, it MIGHT be a stock-for-stock transaction (since Apollo will be on the NYSE soon) but a cash only deal is also possible.
I can say for myself I almost fell out of my chair when I got the email from Cedar Fair investor relations " CEDAR FAIR AGREES TO BE ACQUIRED BY AFFILIATE OF APOLLO GLOBAL MANAGEMENT "
I am surprised yet considering the debt load that CF is under I can't say I didn't think a buyout or serious restructuring would happen, especially since CF announced they would be suspending dividends for 2010 and possible sales of a few of their parks to reduce debt.
As far as my shares are concerned I am indifferent, I'll be happy take the cash, or I will accept shares of Apollo. I have not shoveled a ton of money in shares.... I started buying when the shares were down to around $6.
Coming from experience working for a local company that was purchased by a larger company with virtually no experience owning and operating a bank, we did not see "major" changes until about a year and a half to two years after the merger.
IMO I really don't think it's time to speculate closure and liquidation of parks. If that were to happen it would be after Apollo really gets their hands dirty in the newly aquired company.
I've already planned to visit KD, CP, KI, and KBF next year, this aquisition will not change my plans by no means.
I honestly think all will be okay, I'd like to think that CF is looking out for what is best for its parks, employees, and shareholders......but I could be wrong....
I love the "Forward-Looking Statements" section. We believe that we should be able to turn this company around, but we cannot predict the future and you cannot hold us liable if these statements do not become true.
I think the unbelievable thing is the amount of turnover the past couple of years have brought in the industry.
Six Flags sells off numerous properties to Parc Management.
Busch Entertainment goes to Blackstone.
Cedar Fair to Apollo.
There are always opportunities out there, and though recessions generally hurt everyone, they do bring about a lot of change and hope.
What's funny to me is that after all the speculation that Six Flags, SFMM specifically, was going to be sold, we've seen Busch, Universal, and now Cedar Fair all sold first!
There'll probably be some consolidation, but I think what we'll see the most of are actions meant to secure a lasting profitability and viability of CF's properties. To describe a park like Cedar Point as "as good as gone" would be a gross exaggeration at this point.
Knott's will likely benefit greatly due to its ability to be open year-round, and its proximity to Disneyland makes it an attractive potential recepient of major investment in the eternal struggle for marketshare. It'll be very interesting to see what this means for the future of KBF.
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