Knott’s Berry Farm’s parent company, Ohio-based Cedar Fair Entertainment, announced this week it has agreed to sell the company to asset manager Apollo Global Management.
The $2.4 billion transaction involves more than $600 million in cash, with the rest financed by J.P. Morgan, Bank of America, and others. As part of the deal, Cedar Fair would refinance the debt it acquired in 2006 when it bought several parks from rival Paramount.
Cedar Fair has owned Knott’s since the company purchased the park from the Knott family in 1997.
Under the plan approved unanimously by the Cedar Fair board, shareholders would get $11.50 per share. Cedar Fair’s stock traded at $11.20 at midday on Thursday, and closed around $9 on Wednesday.
Besides Knott’s, Cedar Fair owns 10 other amusement parks, seven water parks, and five hotels across the United States and Canada.
In November, Cedar Fair reported attendance had dropped at its theme parks-and revenue along with them-for the first nine months of 2009, compared with the same period last year. Net revenue company-wide was $810.5 million, down by $66.5 million from the same time last year.
Before it can close, the deal would need approval from the federal government and two-thirds of the company’s current shareholders. Cedar Fair official urged shareholders to bless the deal.
“We have concluded,” CEO Dick Kinzel said in announcing the deal, “that the transaction with Apollo is in the best interest of our unitholders.”
How the proposed transaction would affect Knott’s is unclear. Knott’s officials referred questions to the Cedar Fair corporate office. Cedar Fair is expected to release more details later in the day.