Apollo’s amusement park deal collapses

Apollo Global Management's attempted foray into entertainment parks has ended for now, as the firm and Cedar Fair, which agreed to a $2.4 billion take-private, have mutually agreed to terminate the deal.

The transaction “does not have the required level of investor support”, Dick Kinzel, chairman, president and chief executive officer at Cedar Fair, said in a statement. “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.” The company is paying Apollo $6.5 million for reimbursement of expenses because the deal fell apart.

Cedar Fair runs several amusement parks in the US, including Dorney Park in Pennsylvania, Canada’s Wonderland, near Toronto, Carowinds in North Carolina and Worlds of Fun in Missouri.

Apollo had offered to pay unitholders $11.50 in cash for each Cedar Fair limited partnership unit, which, at the time, represented a 43 percent premium over the park’s volume-weighted average closing unit price over a 30-day period. The Wall Street Journal reported Cedar Fair’s debt at $1.6 billion. Shares on Tuesday ranged from $11.21 to $12.47.

Apollo declined to comment about the deal.

Apollo’s deal would have come amid growing interest in amusement parks by private equity firms. The Blackstone Group agreed in October to pay $2.7 billion, including $1 billion of equity, to buy Busch Entertainment from Anheuser-Busch InBev. Blackstone has a collection of amusement parks, including Italy’s Gardaland, the UK’s Thorpe Park and four Legoland amusement parks in the US and Europe.

Goldman Sachs Capital Partners in March 2009 made a tender offer of ¥50,000, or about ¥140 billion (€1.1 billion; $1.5 billion), for the outstanding shares of Universal Studios Japan.