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Knott's Berry Farm owner pulls out of Apollo buyout deal

Cedar Fair Entertainment, which owns 11 amusement parks and seven water parks, said it made the move after major shareholders objected to an $11.50-a-share offer from Apollo Global Management.

April 07, 2010|By Tom Petruno

Cedar Fair Entertainment Co., the amusement park owner whose properties include Knott's Berry Farm in Buena Park, on Tuesday called off its buyout deal with private equity firm Apollo Global Management after major shareholders objected.

But Cedar Fair stock rose on speculation about other possible merger ideas.

The Ohio company said it pulled out of the deal because the transaction lacked "the required level of investor support." The firm said it would take time to consider its "next steps."

Cedar Fair owns 11 amusement parks, including Knott's, seven water parks and five hotels in the U.S. and Canada.

New York-based Apollo had agreed to pay $11.50 a share for Cedar Fair. That price valued the company at $2.4 billion, counting its heavy debt -- a burden that had helped to drive its shares down sharply in recent years to as low as $6.10 in November.

The shares have mostly traded above $11.50 since the Apollo deal was announced in December, on speculation that a better offer might surface or that Apollo would raise its bid.

The stock opened sharply lower Tuesday after the company's announcement but quickly rebounded to close at $12.37, up 17 cents, or 1.4%.

Texas investment firm Q Funding, Cedar Fair's biggest shareholder with an 18% stake, said in a regulatory filing Tuesday that it had been contacted by bondholders of amusement park chain Six Flags Inc. about the possibility of combining Six Flags and Cedar Fair.

Six Flags, which filed for bankruptcy protection in June, is trying to work out a reorganization plan with its creditors. Q Funding said it did not "currently intend to engage in conversations" about the possibility of a deal with Six Flags.

tom.petruno@latimes.com

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