SeaWorld Parks & Entertainment Makes Bid to Acquire Cedar Fair

© Cedar Fair

Cedar Fair has confirmed market reports that SeaWorld Entertainment has made a "proposal" that they will be reviewing.  The company's official statement does not include details on the acquisition offer, not even calling it that specifically, however the greater financial market is reporting more details.  Bloomberg reports that people with "knowledge" of the proposal mark the offer at around $60 a unit or a total of $3.4 billion.  Cedar Fair units have traded between $40 and $50 or so over the past year. 

Cedar Fair's brief statement calls the proposal "unsolicited" and "non-binding," and notes that "consistent with its fiduciary duties, and in consultation with its independent legal and financial advisors, the Cedar Fair Board of Directors will carefully review and consider the proposal to determine the course of action that it believes is in the best interest of the Company and its unitholders."

 

Saying this would be an acquisition might not even be the best word, perhaps a merger is really what could take place.  Both companies are of somewhat similar size in several key regards.  Their parks only overlap in a few markets, but do differ to a larger degree in size and offerings.  SeaWorld Parks & Entertainment has an obvious animal focus at many of their larger properties, something Cedar Fair does not focus on.  On the other hand, the latest SeaWorld Parks & Entertainment leaders in recent years seem to be leaning heavily on the addition of thrill rides that are Cedar Fair's bread and butter.  The potentially combined companies would offer a large footprint of parks that would be geographically diverse.

© SeaWorld Parks & Entertainment

There are a ton of speculative changes that could also occur with a merger of this size, not limited to renaming, intellectual property changes, potentially new Sesame Place parks popping up, potential park sales, resort expansion and more.  It's far too early to dig into those, at least on this blog - we will quietly ponder those for now.

Cedar Fair has had acquisition and merger attempts happen before, most notably a very messy one with Apollo Management that fell apart in 2010 due to unitholder displeasure.  Just a few years ago it was rumored that Six Flags also made a bid to purchase Cedar Fair, said to be worth $4 billion but never confirmed that I'm aware of, but Cedar Fair found the offer too low.

Obviously one might think that if a 2019 offer of $4 billion from Six Flags was too low that a 2022 offer of $3.4 billion from SeaWorld Parks & Entertainment would be laughed off by the board.  However, things are quite different now than three years ago, with regard to the pandemic and how both companies have rebounded from it.  I wouldn't label this offer dead in the water just yet, as there could be more to this story in the future.