Theme park stocks jump on report indicating SeaWorld and Cedar Fair are in M&A talks

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• Theme park stocks went for a roller coaster ride in morning trading on a report that SeaWorld Entertainment (SEAS -1.6%) made a $3.4B takeover offer for Cedar Fair (FUN +10.8%).
• Bloomberg reports the bid for FUN was at $60 per unit. Sources indicate the companies are currently working together on a proposal. Cedar Fair (NYSE:FUN) has traded as low as $39.15 over the last year, but stood at $55.18 at last check.
• Shares of Cedar Fair were halted for trading earlier in the session.
• Six Flags Entertainment (SIX +3.6%) also broke higher on news of the sector M&A activity.
• Compare valuation marks on Cedar Fair, SeaWorld and Six Flags.

Comments

[barginhunter]

Newb question how do SEAS have money for a 3.4B offer? Their asset in total as of last quarter is ~2.5B with 430M in cash.

[WesternInvestor22]

@barginhunter issue shares and debt

[PapaWhisky]

$FUN resumed at $55.50

"Cedar Fair confirmed in a statement that it had received and was reviewing an “unsolicited, non-binding” proposal from SeaWorld."

[coaster kid 13]

Six Flags tried this not long ago, and even offered more per share, and it was rejected by FUN. I own Cedar Fair (and Cedar Point is my home park), and if FUN were acquiring some of SEAS key assets, or brand, that'd be one thing - but I do not trust SEAS management. I also prefer FUN's dividend and tax advantages.

I expect this will be rejected.

[MWhistler]

No, just no.

[Sgav]

This combination is not compelling.

[blasted]

Wouldn’t that trigger some surprise taxes on unit holders?

[Bogiedog]

@blasted that is my question to. I’ve been a long time shareholder of FUN and wonder about mlp/ tax situation.

[patfactorx]

We are long time Seaworld pass members. Excited to see them be more well capitalized.

[Jeff1911]

Also it's been a while since I looked at the bylaws for this MLP; however, a takeover requires some super majority vote. It was either 67% or 80%. Buying out Cedar Fair is not your typical play. As far as a merger, I'm not a fan of SeaWorld's management so I'll be a no vote.

[Jeff1911]

Ew, SeaWorld is a f---ing disasster. And $60 per share is way too low.

[coaster kid 13]

@Jeff1911 if I recall, when Six Flags pulled this about 2 years ago, they offered a larger sum per-share and it was still rejected. I expect the same for this.