An extra $157 million wasn’t enough to sway Cedar Fair into selling the company to SeaWorld Entertainment.
SeaWorld had initially offered to buy the company for $3.4 billion, or $60 per share, in a surprise offer first reported by Bloomberg earlier this month. Cedar Fair president and CEO Richard Zimmerman said in its Wednesday earnings call that the offer was then increased to $63 per share, or $3.57 billion, which was rejected by Cedar Fair.
“Consistent with its fiduciary responsibilities, our board, together with its external advisors, carefully evaluated the proposal and determined it was not in the best interests of the company and its unitholders,” Zimmerman said.
He later added that merger and acquisition talks are nothing unusual in the theme park world. “There’s always been, and we get this question all the time, interest in industry consolidation,” ZImmerman said. “I think each player in this space has what they need to be successful. We all pursue slightly different strategies, but it’s a very attractive business model.”
There were no specifics offered on the call about potential deals with other theme park operators. Cedar Fair has rejected acquisition bids before, having turned down a $4 billion offer from rival Six Flags in 2019.
Zimmerman said he was pleased with Cedar Fair’s financial performance in 2021. While the company reported a net loss of $49 million for the year, it beat revenue expectations — despite having 459 fewer operating days across the chain (its only year-round park, Knott’s Berry Farm, was closed until May 2021 due to COVID-19) and increasing labor costs as parks raised wages to attract workers.
“Based on the pace of the recovery over the past six months, as well as the strength of long lead indicators such as the sales of season passes and other all-season products, we believe we’re well-positioned to deliver another outstanding year in 2022,” Zimmerman said.
In contrast to how the company limited spending on new projects in 2021, chief financial officer Brian Witherow said Cedar Fair will invest up to $215 million in new attractions and park upgrades this year. $40 million of those expenditures will be dedicated to finishing renovations at Cedar Point’s Castaway Bay and Sawmill Creek hotels, which have remained closed throughout the pandemic.