SeaWorld makes surprise purchase bid to Kings Island owner – WXIX

CINCINNATI (WXIX) – Cedar Fair, the Sandusky-based owner of Ohio amusement parks Kings Island and Cedar Point, is reviewing a purchase bid from SeaWorld Entertainment.

The bid was unsolicited and comes in the form of a non-binding offer, meaning SeaWorld can withdraw it at any time without penalty. Non-binding offers are starting points for negotiations, sometimes referred to as “agreements to agree,” and don’t impose upon the offering party any contractual obligations.

A Cedar Fair company statement does not disclose the bid amount, but Bloomberg characterizes it as a $3.4 billion cash offer.

Cedar Fair’s Board of Directors is reviewing and considering the proposal “to determine the course of action that it believes is in the best interest of the Company and its unitholders,” according to the statement. “Cedar Fair unitholders do not need to take any action at this time.”

Perella Weinberg Partners LP and Weil Gotshal & Manges LLP are advising Cedar Fair.

The bid has generated some concern in Sandusky about a potential relocation of Cedar Fair’s corporate headquarters away from northern Ohio if the deal proceeds, according to the Sandusky Register.

In addition to Kings Island and Cedar Point, Cedar Fair owns 10 other amusement parks, nine waterparks and fourteen hotels in North America. As of 2019, it employs 2,200 full-time employees and 45,100 seasonal workers.

Shares of the company soared 13 percent Tuesday to their highest price since February 2020.

SeaWorld’s bid of $60 per unit, per Bloomberg, would represent a modest premium over Cedar Fair’s end-Tuesday share price of $57.55.

Jim Shull, retired executive director of Walt Disney Imagineering, commented Tuesday on Twitter, “SeaWorld offering to Buy Cedar Fair for $3.4 billion is a low ball offer however the offer shows the strength of the theme entertainment industry even in the face of COVID-19. Smart companies are preparing for future growth.”

The move would consolidate two of the theme park industry’s largest players—the others including Six Flags, Disney Park and Universal Parks and Resorts—amid renewed optimism about an end to the pandemic and a return to normal attendance levels.

COVID-19 proved especially hard on Cedar Fair, whose share price nosedived to $16.28 in April 2020 as parks across the industry closed under statewide curfews.

Kings Island, for example, attracted just 1.62 million visitors in 2020, down 54 percent from 2019′s count of 3.59 million, per a global attractions attendance report.

Cedar Point attracted 1.02 million, down 72 percent from 2019′s count of 3.6 million.

Every major amusement park experienced the same. Magic Kingdom at Walt Disney World went from 20.9 million attendees to just shy of 7 million. Disneyland lost 80 percent of its traffic. SeaWorld lost 65 percent.

By fall of last year, Cedar Fair’s park attendance had largely returned. Net admissions revenue from January-September 2021 was $480 million, up from just $60 million over the same months in 2020.

The company’s 2021 third-quarter guidance noted strong demand, record in-park per capita spending and a bright outlook in 2022.

Cedar Fair President and CEO Richard Zimmerman touted in that guidance the company’s “quick recovery from the COVID-19 disruption” underscoring the “resiliency of the business model.”

SeaWorld owns seven theme parks and five water parks. The company’s parks do feature rides including roller coasters, though it’s known primarily for its marine animal environments and shows featuring orcas, dolphins and sea lions.

Those same shows garnered negative attention following the death of an orca trainer in 2010 at SeaWorld Orlando.

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