Urges Shareholders to Reject Offer; Puts Itself on Auction Block

By Published on .

Most Popular
NEW YORK ( -- One week after investment firm Red Zone announced a takeover bid for Six Flags, the amusement park giant has struck back by putting itself up for sale to the highest bidder.
Dan Snyder's takeover bid has triggered a struggle for control of the world's second-largest amusement park company.
Related Story:
Mark Shapiro Hired as CEO of Red Zone Investment Firm

High-stakes struggle
In what has quickly become a high-stakes struggle for control of the world's second-largest amusement park company, Six Flags' board asked shareholders to reject the offer by Red Zone, a company owned by Dan Snyder.

Mr. Snyder, a marketing communications mogul who sold his firm, Snyder Communications, to Havas in 2000 for $2.1 billion, is now CEO of Red Zone as well as the owner of the Washington Redskins.

Football team success
Since acquiring that National Football League franchise, Mr. Snyder has used aggressive marketing strategies to improve the team's overall financial performance. Stadium sponsorship revenue has increased 12-fold from $4 million and revenue has doubled to $300 million since 1999. He has indicated his intentions to use similar marketing tactics to revamp the operations and burnish the brand of Six Flags, which has struggled with declining attendance and poor financial performance for several years.

He began buying stock in Six Flags a year ago and last week filed a notice with the Securities and Exchange Commission of his investment firm's intention to buy up 34.9% of Six Flags' outstanding shares for $6.50 per share.

Six Flags' counter offer
In a counter SEC filing yesterday, Six Flags essentially accused Mr. Snyder of making a low-ball offer. Six Flags stock closed yesterday at $7.26, up 52 cents or 11% in response to the latest news.

“Red Zone is seeking to acquire effective control of the company without providing full value to all stockholders,” Six Flags CEO Kieran Burke writes in the filing. “We strongly urge you to reject Red Zone's efforts to remove three directors that you elected and replace them with its slate of handpicked nominees.”

The conditions of Mr. Snyder's original offer included removal of three board members and the election of three new ones, including himself as the new chairman of Six Flags, which operates 32 parks in North America and does just more than $1 billion in annual sales.

Walt Disney exec hired
Mr. Snyder last week hired ESPN programming chief Mark Shapiro away from Walt Disney Co., the world’s largest amusement company. In an SEC filing submitted last week by Red Zone, Mr. Snyder said he planned for Mr. Shapiro to become Six Flags CEO, replacing Mr. Burke, the current chief.

Some shareholders see the Oklahoma-based amusement park company worth as much as $9 a share, despite attendance decreases of 4% last year, according financial reports.

In this article: