A couple weeks ago, amusement park fans were surprised by the news that SeaWorld Entertainment had made a bid to purchase Cedar Fair, owner of 17 amusement and water parks in North America. Following confirmation from Cedar Fair that the bid had been received, things got quiet. However, we finally have some real news to report, and that news is that the buyout is not happening.
SeaWorld Entertainment Inc. released a brief statement last night which states simply that the bid for Cedar Fair has been rejected by the company and that SeaWorld does not see a point in continuing to try and make a deal, so SeaWorld is walking away. The statement from SeaWorld reads in full…
In response to inquiries from various stakeholders, we confirm that our offer to acquire Cedar Fair was rejected. Unfortunately, we do not see a path to a transaction.
The statement is brief and doesn’t give even the slightest indication what the problem was. Some analysts called the SeaWorld offer number, $3.4 billion, which worked out to $60 per share, too low. But it’s certainly not uncommon for a buyout like this to come in low and see that number go up through negotiation. Of course, it could be that whatever number Cedar Fair was ultimately looking for was too high for SeaWorld and the two sides couldn’t find a place to meet in the middle.
While the deal between Cedar Fair and SeaWorld may be over, that doesn’t mean that this story is entirely over. Cedar Fair reported its earnings this morning and the company lost $48 million in 2021. An amusement park entity in that state is ripe for a takeover, and with one company having now openly tried, it’s possible others might do the same. SeaWorld, which has been building its reputation as a more traditional amusement park, and is putting less focus on its live animal shows, could also go looking to spend its money elsewhere.
In the days following the announcement of the bid, private equity firm Centerbridge reportedly bought up a fiver percent stake in Cedar Fair, and it seems unlikely that a company like that wants to simply hold on to a large chunk of a company that didn’t make any money last year. We could see Cedar Fair go looking for a new buyer. If they can find somebody willing to pay whatever the company is looking for we could still see a sale happen.
Another major amusement park company, like Six Flags, which is also focused on thrill based attractions, might be interested in increasing its footprint. Alternatively, there could be another media company that might be looking to get into the amusement park industry. Somebody who wants to compete with Disney and Universal could benefit by buying an existing company and then filling it with its existing brands and franchises. It would be a lot easier than building something from scratch.