It's Hitting The Fan!!
Looks like Cedar Fair is finally starting to acknowledge that their financial state is pretty precarious at best - they just put out a press release saying that they are indeed cutting the distribution by 92 cents a unit, to an annual payout of $1 instead of $1.92.
That would have been the big news of the day but they also threw in this little nugget: the company is open to selling Worlds of Fun and Valleyfair to someone if the timing and price is right.
This is all because of the debt the company took on the purchase the Paramount Parks - none of which are suddenly listed for sale... well aside from Great America but they already said they'd ditch that park in a second if the 49ers wanted it.
It's sad that Mr. Kinzel and his board let things get to this. With firms like Merlin Entertainment, and Parques Reunidos lurking around snatching up properties you have to wonder if Cedar Fair is saying they will sell Worlds of Fun and Valleyfair because they know someone wants them... like now. That's sort of how Cedar Fair does things... just look at the ramp up to this distribution cut - they leak their plans out in little bits and pieces in conference calls and news releases. We'll see.
2 comments:
IMO:
Cedar Fair has a large debt load but it will not effect them, they can make the payments and they still can have a successful year. But it limits them on growth. Cedar Fair finally realized that they are paying to much out. I have a lot of shares with them and I still think they pay to much. Lowering the distribution rate is one of the best ideas they have.
The selling of the parks are a good idea. Cedar Fair doesn't want parks in small markets and they don't want stipulations. WoF and Valley are in horrible markets which are really not growing. The GA is a lease and CF does not like to have the carpet pulled from underneath them. Santa Clara can increase the rental payment are not renew the lease when it comes do and CF investment went to crap. Some might say why not MA, well the market is coming around they had record seasons with increase attendance and not to many company would want that property.
Wow!! Worlds of Fun & Valleyfair could be sold to another park owner...just makes me kind of mad/sad...that also goes with California's Great America, but I guess it's the best for Cedar Fair to pay of it's debt.
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