A couple weeks ago, many coaster and theme park related sites reported that a deal was almost done that would allow Apollo Global Management to purchase Cedar Fair for the paltry sum of $635 million in cash, as well as assuming about $1.7 billion of Cedar Fair's debt. Such reports may have been a bit premature though as no less than five lawsuits have been filed against Cedar Fair by shareholders with potential for more to follow in the coming days.
The $635 million cash payout would amount to approximately $11.50 per partnership unit. While this is a solid improvement from March when units were trading for a minuscule $6, as recently as September of 2008 these were being traded for $23 per unit.
Investors say that Cedar Fair purposefully waited until share prices were at their lowest in years to agree to terms on a buyout that undervalued shareholders' stock in the company. Such a move would be of great benefit to Apollo as it plans to purchase all shares in the company and thus becoming private, out from under the scrutinizing eyes of shareholders and off of the unstable market.
Apollo, which has $51 billion in assets, also owns Harrah's Entertainment, Norwegian Cruise Lines, and Sirius Satellite Radio among others. It seems at current though that it may be a while before they can add Cedar Fair to that list as the legality of the deal must be sorted out prior to any closing.