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Thread: Reuters: Six Flags in bid to merge with Cedar Fair - sources

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    Reuters: Six Flags in bid to merge with Cedar Fair - sources


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    The move shows how Six Flags, already the world’s largest regional theme park operator, wants to expand its footprint so it can increase ticketing pricing power, even as Chief Executive James Reid-Anderson is preparing to retire by the end of February.
    I'm not sure I buy this. There are almost no markets in which there is a significant overlap. Magic Mountain is northwest of LA, while Knotts is to the southeast by Disneyland with several million people in the middle that are probably more influenced by traffic than price. CA Great America is in the southern end of the San Francisco Bay, while SF Discovery Kingdom is well to the north; most of the people who live in that market have another traffic hellscape to get to one or both. SF America is the eastern Maryland suburbs of DC, within easy driving distance to Baltimore while Kings Dominion is almost two hours south of DC, but fairly close to Richmond. None of the others are within 3 hours of each other, unless there's a pair I'm not thinking of. These are mostly drive-to/regional draws. If few of them are competing on price, pricing power seems iffy as a rationale.

    It seems more likely that the motivation would be to get better supplier deals and back-office consolidation. Six Flags has about 32M annual guests worldwide; Cedar Fair about 26M. The supplier deals might really make a difference, but the back-office costs are likely to be minuscule compared to both OpEx and CapEx. In the face of that, the two have had very different strategic approaches, historically: Six Flags isn't really worried about gate integrity (the price someone pays to get in) and works hard to upsell later. Cedar Fair is more focused on the gate, though both are starting to bend towards the other. Cedar Fair also has more out-of-park investment in the form of hotels, etc. CF focuses on dividend returns, SF on share price growth.

    It's also worth noting that Cedar Fair took on enormous debt buying Paramount out, and it took a long time to dig out of that. That was an acquisition, though, not a merger.

    There's a lot of discussion about this over on Coaster Buzz. It can be summarized with "Six Flags would ruin Cedar Fair" so maybe worth avoiding. My guess is that the CF board will say "thanks but no thanks," after hearing from institutional investors who are there precisely because of the dividend focus.

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    This was faster than I expected. The offer is "inadequate."
    https://www.reuters.com/article/us-c...-idUSKBN1WJ1Z3

  4. #4
    Quote Originally Posted by bnoble View Post
    Six Flags isn't really worried about gate integrity (the price someone pays to get in) and works hard to upsell later. Cedar Fair is more focused on the gate, though both are starting to bend towards the other. Cedar Fair also has more out-of-park investment in the form of hotels, etc.
    That would explain why I've stayed at Breakers Express and at Lighthouse Point. Naturally, at the time, we thought *we* were the ones making the choice.

    Quote Originally Posted by bnoble View Post
    CF focuses on dividend returns, SF on share price growth.
    Interesting. Did not know.

    Quote Originally Posted by bnoble View Post
    There's a lot of discussion about this over on Coaster Buzz. It can be summarized with "Six Flags would ruin Cedar Fair" so maybe worth avoiding.
    Perhaps a somewhat charitable summary of that discussion.

  5. #5
    Senior Member Snickers's Avatar
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    The last time I visited a 6 Flags I was terrified by the overall shoddiness on the rides, buildings, and workers. It was like McDonald's decided to open a theme park. The "workers" were distracted, unhappy, and careless. The Superman coaster got stuck twice that day; once it was near the top of the highest peak.

    I can't imagine any merger with them would be a benefit.

  6. #6
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    To be fair, SIX has done a good job lately in improving operations at their parks, and some are up there with some of the best regional parks anywhere. For example Six Flags Fiesta Texas is one of my favorites; I've been there a couple of times now, and would be happy to go back.

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