Theme park operator Cedar Fair is reportedly reviewing an acquisition bid for the company made by SeaWorld Entertainment. Reports of the unsolicited, non-binding buyout proposal emerged earlier in the week, in which SeaWorld offered to acquire the company for $60 per share.
Based on Cedar Fair's outstanding shares, the offer would value the company at around $3.4 billion. Cedar Fair said on Tuesday that it was holding consultation meetings with its financial and legal advisers, including Perella Weinberg Partners L.P. and Weil, Gotshal & Manges. The company said it would be attempting to determine the best course of action that would be in the best interest of its shareholders.
Sources with knowledge in the matter said deliberations are still ongoing, and it is still not yet clear if Cedar Fair will accept the offer or if it would lead to an actual transaction.
SeaWorld's offer represents a slight premium over Cedar Far's current share price, which closed at $56.25 per share on Tuesday - up by 13% following news of the unsolicited offer. SeaWorld's surged by around 2% following the release of the news, ending Tuesday at $61.12 per share.
Cedar Fair, which has been rebounding from theme park closures caused by the coronavirus pandemic, recently announced a total net income of $148 million for the third quarter of 2021. The figure was lower than the $190 million it reported in the same quarter last year. The company recorded third-quarter net sales of $753 million. During the third quarter, attendance at its parks was only 82% of what it was in the same period last year.
Meanwhile, SeaWorld reported a net income of $102.1 million and sales of $521.2 million for the third quarter of 2019, up 4.2% and 10%, respectively, over the same period last year. Despite an increase of 5.7 million guests year over year to 7.2 million, SeaWorld's third quarter park attendance was down 11% from the third quarter of 2019.
Cedar Fair owns and runs 13 different assets, including 11 different amusement parks. Cedar Fair's parks include Kings Island near Cincinnati, Knots Berry Farm in California, Michigan's Adventure, and Canada's Wonderland, in addition to Cedar Point.
SeaWorld Entertainment operates 12 theme parks in the United States, including SeaWorld, Busch Gardens, and Sesame Place. SeaWorld is set to become the world's fifth-largest theme park corporation if the transaction with Cedar Fair pushes through. Six Flags would fall behind, leaving only Disney Parks, Merlin Entertainments, Oct Parks China, and Universal Parks and Resorts behind.
