UPDATED: SeaWorld makes $3.4B offer to buy Cedar Fair

SANDUSKY — Sandusky officials are trying to figure out what might happen if SeaWorld completes its effort to take over Cedar Fair, Cedar Point's parent company. Cedar Fair confirmed Tuesday that it is considering a takeover offer from SeaWorld Parks & Entertainment, a Florida-based company that owns seven theme parks and five water parks. The company noted in a news release that "it has received an unsolicited non-binding proposal from SeaWorld Entertainment, Inc." "Consistent with its fiduciary duties, and in consultation with its independent legal and financial advisers, the Cedar Fair board of directors will carefully review and consider the proposal to determine the course of action that it believes is in the best interest of the company and its unitholders. Cedar Fair unitholders do not need to take any action at this time," the news release said. "Perella Weinberg Partners L.P. is serving as financial adviser to Cedar Fair and Weil, Gotshal & Manges is serving as legal counsel," the statement indicated. Appreciate news from your community? Click here to subscribe to the Register. Dick Brady, Sandusky's ex officio mayor, said Tuesday that he's trying to stay calm and await developments but admitted that he's following the news "minute by minute." "We're all in a wait and see," Brady said. "These kinds of deals don't always come to fruition." Brady said the deal should not effect Cedar Point but said he does wonder what might happen to Cedar Fair's commitment to keep its corporate headquarters in Sandusky. SeaWorld is based in Orlando, Florida. "I don't think they're moving to Sandusky, Ohio," Brady quipped. Bloomberg reported Tuesday that SeaWorld has made a $3.4 billion takeover bid for Cedar Fair. Cedar Fair owns 13 properties, including 11 amusement parks with two in Ohio — Cedar Point and Kings Island, near Cincinnati — and four outdoor waterparks. According to Bloomberg, negotiations are ongoing, and it's not clear if a deal will be reached. The activity caused prices to jump for stocks of the two companies. "Cedar Fair rose 9.6% to $54.51 at 11:23 a.m. in New York before trading was halted, giving the company a market value of about $3.1 billion," Bloomberg reported. "SeaWorld rose 4.7% to $62.35 at 12:35 p.m. for a market value of about $4.8 billion." Brady said he likes to pay attention to stocks of local interest, and he suddenly noticed Tuesday that trading had been halted in Cedar Fair's limited partnership units. "They did that for a very brief period of time this morning until they could figure out what was going on," Brady said. If the takeover actually happens, and becomes fact rather than speculation, "We can all speak intelligently," Brady observed. But he said Sandusky's favorite amusement park should be OK. "Cedar Point is going to stay right where they are at," he said. "They are not moving that park." Brady noted the city had reached a new agreement with Cedar Fair just last year, including for higher tax revenues. The city hiked its admissions tax from 4% to 8% and also passed a new 8% parking tax. The discussions with Cedar Fair had been prompted by fears the corporate headquarters might move from Sandusky, Brady said. Referring to the new tax provisions, Brady said, "That's a done deal. That's passed by ordinance." "Those things are on the books. It doesn't matter who they sell their company to," Brady said. Cedar Fair maintaining a corporate presence in Sandusky "was certainly part and parcel of our understanding," Brady said. Similarly, Sandusky's city manager, Eric Wobser said that whatever happens, the tax ordinance is in place. "We will be a good partner to honoring the agreement with Cedar Fair or any future successor to Cedar Fair," Wobser said. Cedar Fair became involved in a possible takeover in 2009 and 2010 when Apollo Global Management offered $11.50 per share, a 28% premium over the then-current price. Apollo also would have taken Cedar Fair private. The possible deal fell through when Cedar Fair unit holders balked. Cedar Fair itself has used acquisitions to expand its family of theme parks. In 2004, Cedar Fair bought Six Flags World of Adventure, the amusement park east of Cleveland formerly known as Geauga Lake. That amusement park got its Geauga Lake name back, but it shut down in 2007, while the Wildwater Kingdom water park there closed after 2016. That acquisition also had another notable outcome: SeaWorld Ohio and its aquatic animal shows shut down. In 2006, Cedar Fair bought five parks in the Paramount Parks chain, including Kings Island in southern Ohio. Cedar Fair soon removed Paramount's name and logo from the parks, integrating them into the Cedar Fair family of parks. SeaWorld is known primarily for its marine animal parks, which feature orcas, known as "killer whales," and other animals such as dolphins and sea lions. Although some of SeaWorld's parks feature roller coasters, buying Cedar Fair would allow SeaWorld to shift away from relying heavily on animal shows, which have brought clashes with animal rights activists and sometimes attracted negative publicity. In 2010, an orca killed a trainer, Dawn Brancheau, at SeaWorld Orlando. Micechat.com, a website that covers amusement park news, particularly Disney properties, said Tuesday that the news illustrates that amusement parks have recovered from having to shut down in 2020 during the pandemic. It speculated that other acquisition attempts might be pending. "SeaWorld and other parks are seeing huge profits in recent quarters due to a strong rebound in attendance, higher prices, and lowered costs (as staffing, entertainment and other services are slow to be restored)," the website said. Cedar Fair announced on Nov. 3 that its net revenues for the third quarter, ending Sept. 26, 2021, totaled a record $753 million, up 5% from the third quarter of 2019. (Because of the pandemic, the company went back two years for its comparisons.) Early sales of 2022 season passes were at a record pace, Cedar Fair said. In 2019, the Reuters news agency reported Cedar Fair had rejected a $4 billion acquisition offer from Six Flags. 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."