No mas, Six Flags (NYSE: PKS)! We get it. You don't want minority shareholder and Washington Redskins owner Dan Snyder meddling with your plans to sell the company. That was the gist of last night's press release. It has been the same theme resonating through seven different press releases that the company has issued over the past two weeks.
The war of the words began over the summer when Snyder proposed replacing three of the seven members of the Six Flags board with his own choices from the real estate and entertainment industries.
Six Flags went on to put the company up for sale and announce the closure of at least one of its parks. It insists that it is still collecting buyout proposals and will have something to present its investors next month.
Six Flags has been a colossal disappointment for investors over the past several years. It wasn't until Snyder's storm culminated in the company officially putting itself on the block that the shares finally showed signs of life.
The irony in all this is that Six Flags was starting to take baby steps forward before it became buyout fodder. The company is posting revenue gains at nearly all of its regional amusement parks. Earnings before interest, taxes, depreciation, and amortization (EBITDA) is expected to grow by at least 16% this year and another 13% come 2006.
Then again, that's also the problem. Talking about a company in EBITDA terms is a lot like describing a blind date as having a great personality. Six Flags is a "Butterdebt" kind of gal. She's fun and all, but her debt? The company has $2.1 billion in debt, or roughly three times the company's market cap.
That's how folks like Snyder and Microsoft's (Nasdaq: MSFT) Bill Gates have been able accumulate meaty chunks of the actual shares despite accounting for a much smaller piece of the company's enterprise value.
The urgency of Six Flags' rat-a-tat-tat press release spouting is intriguing. If you're going to kill a tree, Six Flags, do so in the name of building a world class wood coaster. Perpetually calling out the enemy makes it seem as if the company is truly afraid that the board will come undone by shareholder mandate before a worthy acquisition offer is received.
I'm curious as to what Six Flags will present to investors in the coming weeks. Is a company really in talks to swallow Six Flags whole? I can't see other companies with theme park interests like Cedar Fair (NYSE: FUN), Disney (NYSE: DIS), Viacom (NYSE: VIA) and Anheuser-Busch (NYSE: BUD) making an offer for all of Six Flags. However, I can see at least three of those companies interested in at least some of the Six Flags properties. That may open up the possibility of a private equity firm coming in with a reasonable buyout offer in order to carve out the company piecemeal.
Either way, CEO Kieran Burke and his board of cronies are unlikely to be running Six Flags for too much longer. With so much potential left on the wrong end of the turnstiles, good riddance, I say.
Don't like it, Six Flags? Go ahead. Hit me with a press release.
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Longtime Fool contributor Rick Munarriz loves to take his family to new amusement parks every summer. He practices what he preaches; he owns shares in Disney and Cedar Fair.
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