On Monday December 11 in my article Cedar Fair: Add some fun to your portfolio, I told you that there was unexplained price action in this stock and that such price action sometimes meant a favorable press release or acquisition announcement was pending. I advised buying around 9 with a protective stop loss at 8 in case something happened.
Below is today's press release. If you bought at 9 and your shares are acquired from you at 11.50 you have 2.50 per share profit. 2.50/9 = 22.78% profit. Not bad for a 10 day investment.
Merry Christmas - now pay off your credit card with these profits so you won't have to worry about how to pay for all those presents under the tree.
Press release:
Cedar Fair LP, the owner of Kings Island theme park in Mason, will be acquired by Apollo Global Management under a definitive merger agreement announced Wednesday.
Apollo, a private equity firm, will pay $11.50 in cash for each limited partnership unit, for a total of about $2.4 billion, according to a news release. Shares of Cedar Fair (NYSE: FUN) opened at $9.08 Thursday.
The deal is subject to approval by unit-holders, as well as regulatory approvals and other conditions. Pending those approvals, the deal will close by the beginning of second-quarter 2010, Cedar Fair said.
The company can also solicit other proposals from third parties for 40 days, under the terms of the agreement.
At the deal’s completion, Cedar Fair will become a private company, owned by an Apollo affiliate.
“We have considered a wide range of strategic alternatives over the past several years,” said Dick Kinzel, chairman, president and CEO of Cedar Fair, in the release. “After considering these strategic alternatives, we have concluded that the transaction with Apollo is in the best interest of our unit-holders.”
Apollo Global Management, with offices in New York, Los Angeles, London, Singapore, Frankfurt and Mumbai, has more than $51 billion in assets under management.
Cedar Fair posted third-quarter net income of $107.6 million, or $1.92 per share, compared to $91.5 million, or $1.65 per share in the year-ago quarter. Total net revenues fell to $519.9 million from $540.3 million. The company said in November that it would suspend its dividend beginning in 2010 to pay down short-term debt.
Cedar Fair (NYSE: FUN), headquartered in Sandusky, is a publicly traded partnership that owns and operates 11 amusement parks, six outdoor waterparks, one indoor waterpark and five hotels in eight states and Ontario. The company acquired Kings Island in June 2006, as part of its $1.24 billion purchase of Paramount Parks.
Jim Van Meerten is an investor who writes on financial matters here and on Financial Tides. Please leave a comment below or email FinancialTides@gmail.com
Disclosure: I hold no positions in this stock at time of publication
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