From the Sandusky Register…

SANDUSKY

Apollo’s takeover bid may be gone, but Cedar Fair officials already are preparing for another possible takeover attempt.

The amusement park chain has prepared a poison pill to feed any would-be predator trying to gobble up the company in a hostile takeover bid.

The company filed the poisonous rights plan this week.

It was created “to ensure that all unitholders receive fair and equitable treatment in the event of any hostile takeover attempt to gain control of the company,” Cedar Fair leaders explained in a news release.

Cedar Fair filed documents with the Securities and Exchange Commission explaining the rights plan would be triggered if any company acquired 20 percent of more of Cedar Fair’s outstanding units. The plan has several provisions designed to make it harder to take over Cedar Fair against the wishes of the company’s management.

Under one scenario, for example, each current unitholder would have the right to buy $20 worth of additional units for each unit the investor owns, at a price that’s essentially a two-for-one deal.

“Assuming a value of $10 per unit at such time, the holder of each valid right would be entitled to purchase four units for $20,” the document states.

Adding more units would dilute the ownership of the company attempting the takeover.

Such poison pill options are rarely exercised. The point is to force any company trying to take over Cedar Fair to negotiatiate with the company.

The provision also buys Cedar Fair time to consider its options as it attempts to deal with $1.6 billion of debt, said Jeremy Jacobs, a Cedar Fair spokesman.

“The company is aware that the credit markets seem to be improving and it’s talking with its banks in that context to see how they can address the capital structure to the benefit of unitholders,” Jacobs said.

Cedar Fair carries $1.54 billion of term debt, $640 million that matures in 2012 and $900 million that matures in 2014, said Stacy Frole, director of investor relations for Cedar Fair.

“The rights plan was not adopted in response to any specific effort to acquire control in the company,” Frole said.

Texas investment banker Geoffrey Raynor holds about 18 percent of Cedar Fair’s outstanding units, much of them through Raynor’s company, Q Funding.

On Tuesday, the same day the Apollo and Cedar Fair deal fell through, Q Funding filed an SEC document stating that it had been approached by “certain holding company bondholders” to discuss the possibility of merging Cedar Fair with Six Flags.

“It became apparent … that these holding company bondholders were likely going to control Six Flags, Inc. and, since then, there have not been any additional conversations with such bondholders,” the document said.

The document didn’t identify the bondholders and a spokesman for Q Funding declined comment.

The Reuters news agency has reported that a group led by Stark Investments is poised to take control of Six Flags under a new restructuring plan filed by the bankrupt company.

The speculation about Six Flags and Cedar Fair hasn’t hurt Cedar Fair’s unit price. The closing price Wednesday was $12.87, up 50 cents from the closing price the day before.

Cedar Fair Press Release

SANDUSKY, Ohio, April 6, 2010 – Cedar Fair Entertainment Company (the “Company”) (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that it and affiliates of Apollo Global Management, a leading global alternative asset manager, have mutually agreed to terminate the previously announced definitive merger agreement.

Consistent with the terms of the agreement, Cedar Fair will pay Apollo $6.5 million to reimburse Apollo for certain expenses incurred in connection with the transaction. In addition, both parties will release each other from all obligations with respect to the proposed merger transaction as well as from any claims arising out of or relating to the merger agreement.

As a result of the termination of the merger agreement, the Special Meeting of Unitholders to be held on April 8, 2010 has been cancelled. The Company will hold its 2010 Annual Meeting of Unitholders on Monday, June 7, 2010, for unitholders of record as of April 23, 2010.

Dick Kinzel, chairman, president and chief executive officer of the Company, said, “The Board has heard from Cedar Fair unitholders and it is apparent that the merger transaction does not have the required level of investor support. We are honored and excited by the opportunity to continue to manage and operate Cedar Fair as a public company and to provide our guests with an outstanding experience.

“Our 2010 operating season is upon us, and we have already introduced major new attractions at two of our parks. Intimidator305, a 305-foot-tall roller coaster at Kings Dominion, and Intimidator, a 232-foot-tall roller coaster at Carowinds, both had very successful opening days. We hope to continue this momentum across the rest of our properties and throughout the operating season. As we execute on our business objectives, we will also be evaluating next steps to address our capital structure. The Board and management team remain committed to acting in the best interests of all Cedar Fair unitholders. We appreciate the feedback that we have received from unitholders as well as Apollo’s interest in Cedar Fair and their cooperation and professionalism throughout the process.”

In order to allow adequate time to evaluate all options, a unitholder rights plan (the “Rights Plan”) has been adopted. The Rights Plan is designed to enable all unitholders to realize the long-term value of their investment in the Company and to ensure that all unitholders receive fair and equal treatment in the event of any hostile attempt to gain control of the Company. The Rights Plan is not designed to prevent transactions that treat all Cedar Fair unitholders fairly.

Under the plan, the rights will initially trade together with the Company’s units and will not be exercisable. The rights will generally become exercisable after a person or group becomes a beneficial owner of 20% or more of the Company’s units. The rights will expire on April 5, 2013, unless earlier redeemed, exchanged, or amended.

The Rights Plan was not adopted in response to any specific effort to acquire control of the Company, but as an appropriate preventative measure to ensure all unitholders are protected while the board of directors considers next steps. A copy of the merger termination agreement and the Rights Plan have been filed with the Securities and Exchange Commission and can also be found on the Company’s website at www.cedarfair.com/ir/financial/sec.

About Cedar Fair

Cedar Fair is a publicly traded partnership headquartered in Sandusky, Ohio, and one of the largest regional amusement-resort operators in the world. The Company owns and operates 11 amusement parks, six outdoor water parks, one indoor water park and five hotels. Amusement parks in the Company’s northern region include two in Ohio: Cedar Point, consistently voted “Best Amusement Park in the World” in Amusement Today polls and Kings Island; as well as Canada’s Wonderland, near Toronto; Dorney Park, PA; Valleyfair, MN; and Michigan’s Adventure, MI. In the southern region are Kings Dominion, VA; Carowinds, NC; and Worlds of Fun, MO. Western parks in California include: Knott’s Berry Farm; California’s Great America; and Gilroy Gardens, which is managed under contract.

Forward Looking Statements

Some of the statements contained in this news release may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995, including statements as to Cedar Fair L.P.’s expectations, beliefs and strategies regarding the future. These forward-looking statements may involve risks and uncertainties that are difficult to predict, may be beyond the Company’s control and could cause actual results to differ materially from those described in such statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Important factors could adversely affect the Company’s future financial performance and cause actual results to differ materially from the Company’s expectations, including general economic conditions, competition for consumer leisure time and spending, adverse weather conditions, unanticipated construction delays and the risk factors discussed from time to time by the Company in reports filed with the Securities and Exchange Commission (the “SEC”). Additional information on risk factors that may affect the business and financial results of the Company can be found in the Company’s Annual Report on Form 10-K and in the filings of the Company made from time to time with the SEC. The Company undertakes no obligation to correct or update any forward-looking statements, whether as a result of new information, future events or otherwise.

From the Sandusky Register…

SANDUSKY

The ‘no’ votes are piling up against the proposed $2.4 billion Cedar Fair buyout.

Neuberger Berman, an asset management firm in New York, has announced in an SEC filing that it opposes the proposed merger agreement. Neuberger manages 9.6 percent of Cedar Fair’s outstanding units, and has full discretion on voting for 8.6 percent of those units.

Neuberger’s disclosure follows an announcement from Q Funding, a Fort Worth company controlled by Texas investment banker Geoffrey Raynor, that it intends to vote against the proposed merger and is asking other unitholders to join it in opposing the deal.

The most recent SEC filing indicates that Raynor now controls voting rights for about 15 percent of Cedar Fair’s units.

Cedar Fair must win approval of the Apollo Global Management deal from votes representing two-thirds of its units, and unitholders who don’t bother to vote will have their units counted as ‘no’ votes.

The amusement park company is expected to mail out a final proxy statement within days giving a deadline on when to vote on the proposed deal.

The merger agreement reached in December by Apollo and Cedar Fair offers unitholders $11.50 per unit. Cedar Fair’s units closed Tuesday at $12.19 per unit.

The announcement that two entities controlling about 23 percent of the votes oppose the deal makes it “very difficult” for the merger to go through, said analyst Justin Lumiere, who runs the Special Situations/Risk Arbitrage Group for Summit Securities Group in New York.

Small investors in Sandusky also have not greeted the merger agreement with open arms, according to local brokers and lawsuits filed at the courthouse.

John Sprau, who lives in Sandusky, said he continues to believe the $11.50 offer is too low.

Stacy Frole, director of investor relations for Cedar Fair, said Tuesday the company will continue to communicate its message that Cedar Fair’s board believes Apollo’s offer was fair.

“We will continue as we go through this process to reach out to investors, including Q Funding and Neuberger Berman,” she said.

Asked if Cedar Fair believes the merger agreement now appears likely to fall through, she said, “We wouldn’t be able to speculate on the outcome of the vote at this point.”

Lumiere said Cedar Fair no doubt has lawyers advising Frole and other company officials about what to say. Once Cedar Fair signed an agreement with Apollo, its spokespersons have little choice but to repeat that the board supports the deal with Apollo, he said.

“They’ll just keep repeating it over and over again,” Lumiere said.

He issued a new report about the proposed merger on Monday. In it, Lumiere applied the latest financial numbers from comparable entertainment companies to arrive at an estimate for what Cedar Fair’s units might really be worth. He arrived at a possible value of $13.19 per unit.

“It could feasibly trade where it is trading right now, without a deal,” he said.

From BusinessWeek…

Cedar Fair LP said Tuesday that it is proceeding with its proposed $635 million acquisition by asset manager Apollo Global Management.

The amusement and water park operator said in a filing with the Securities and Exchange Commission that it reached out to 32 other potentially interested parties during the 40-day period in which it was allowed to try to find alternative bids. In that time Cedar Fair, based in Sandusky, Ohio, said six of the parties wanted confidential company information in order to evaluate a possible deal but none of them wound up making an offer.

Now that the go-shop period has ended, Cedar Fair said in the filing that its board still believes the proposed deal with Apollo maximizes value for its unitholders.

Cedar Fair owns and runs 11 amusement parks, six outdoor water parks and five hotels, including Cedar Point in Ohio, Canada’s Wonderland near Toronto, Dorney Park in Pennsylvania and California’s Knott’s Berry Farm and Great America.

The potential acquisition comes at a time when the company has struggled to keep consumers coming to its properties. With the economy still fairly fragile and unemployment numbers high, many consumers have pulled back on their discretionary spending, which has pushed amusement and water park attendance levels lower.

Even rival theme park operator Six Flags has succumbed to recessionary pressures, filing for bankruptcy protection in June.

Cedar Fair accepted Apollo’s $11.50 per share offer last month. The transaction’s total value is estimated by the companies at $2.4 billion, which includes the assumption of debt.

At the time Cedar Fair agreed to the acquisition, the offer price was a 27 percent premium to its closing stock price of $9.08. The shares fell 29 cents, or 2.3 percent, to $12.49 Tuesday morning, or 8.5 percent above the offer price.

The acquisition is expected to close by the start of the 2010 second quarter. It is dependent on regulatory clearance and holders of two-thirds of the company’s shares supporting the transaction.

From the Sandusky Register…

There’s just one shopping day left until Christmas.

But if you want to buy an amusement park chain with 11 amusement parks and six water parks, there’s still about 32 shopping days left.

Cedar Fair has 40 days from Dec. 16 — the day it signed an agreement to be acquired by an affiliate of Apollo Global Management — to consider other offers. That period runs through Jan. 25, said Stacy Frole, director of investor relations for Cedar Fair.

“It’s referred to as a go-shop period,” she said.

If you want a chance to buy Cedar Fair, you’d better have a lot of money.

Apollo has offered $11.50 per unit and is taking on all of Cedar Fair’s debt.

That adds up to a deal worth $2.4 billion, give or take a few pennies.

Some analysts suggest Apollo’s offer is a bit low.

Cedar Fair must win approval from at least two-thirds of the unitholders for the deal to go through.

George Andrew Karolyi, professor of finance and global business at Cornell University, said the offer seems fair. He noted that $11.50 is a 28 percent premium over the closing price when the offering came out.

“A typical premium in most of these types of transactions is 20 percent,” Karolyi said. “It’s hard to imagine in this environment people would price it up much higher than that.”

Karolyi said he assumes other companies are looking at whether to try to top Apollo’s offer.

The BlackStone Group, which like Apollo is a private equity company headquartered in New York City, bought SeaWorld Parks and Entertainment late this year. It completed the transaction Dec. 1.

“I’m sure they’re probably asking themselves whether they should make a move on this Cedar Fair investment,” Karolyi said. “I don’t see why they wouldn’t. If they are making a serious push in this business, then why not?”

Cedar Fair won’t comment on inquiries it receives, Frole said. Any expressions of interest or offers would go to Cedar Fair’s financial advisors, Rothschild and Guggenheim Securities, Frole said.

Assuming that a better offer doesn’t come along, unitholders will be mailed proxy statements in February that include a ballot to vote on the Apollo deal, Frole said.

The unitholders may mail their ballots in, vote using the Internet or vote over the telephone, Frole said.

Each unit represents one vote, and the deal with Apollo must be approved by owners of two-thirds of the outstanding units.

“It’s very important for everybody to vote,” Frole said. “Like an election, every vote matters.”

The board of directors and Cedar Fair’s management team are in support of the deal, Frole said, encouraging people to read the proxy statement when they receive it.

Filed by Jan. 8, the Securities and Exchange Commission will have 30 days to review the proxy statement before it’s mailed. When it’s filed, though, it will be a public document, available at the SEC’s Web site.

John Sprau, a unitholder involved in a civil lawsuit that seeks to halt the Apollo deal, said he looks forward to reading the proxy statement.

“I am kind of anxious to see where we’re going from here,” he said.