Mutual fund to sharply cut holdings in Cedar Fair

The Texas mutual fund that currently is the largest shareholder of Cedar Fair LP stock has announced that it intends to sharply decrease its holdings in the Sandusky amusement park company.

Q Investments, which owns 18.1 percent of the company that owns Cedar Point and other amusement and water parks nationwide, said in a regulatory filing that it would sell 3 million of its 10 million Cedar Fair shares over the next year, "depending on market conditions." The filing said it would make the divestment if the share price stays at or above its current $22.

The sale of the stock, the investment firm said, is in keeping with its portfolio guidelines of not having too much stock value in a given company. The Cedar Fair stock price has almost doubled in the past two years; when Q Investments initially bought into Cedar Fair, the share price was $11.45.

At 7 million shares, the sale would reduce Q Investments to Cedar Fair's second-biggest shareholder at 12.7 percent. Neuberger Berman Group LLC, an independent asset management firm that holds just over 8 million shares, or 14.6 percent of the company, would become the biggest shareholder.

Cedar Fair has had repeated battles with Q Investments, which sought reforms starting shortly after it acquired stock on Jan. 20, 2010.

The mutual fund, run by billionaire Texas banker Geoffrey Raynor, forced the company to have different people hold the chairman and chief executive titles, and its pressure led to granting shareholders the ability to nominate board members.

It sought higher dividends, too, which are now being paid.

Most of Q Investments' proposals for change were resisted by Cedar Fair management and board -- some resulted in litigation -- but were made with the stated motive of increasing the company's value.

Q Investment, which said it would have no additional comment on its decision, gave no timetable for the stock sale except "throughout the next year or so." Fund officials indicated that the sales would occur incrementally so as not to upset Cedar Fair's share price.

Whether its filing with the U.S. Securities and Exchange Commission means Q Investments will be less active in seeking changes in the company is unclear.

But it said in the filing that it is "optimistic about the possibility for further price appreciation [of the stock] over the next few years."

Cedar Fair spokesman Stacy Frole said the company noted Q Investment's decision. "I think we pay attention to all of our unitholders," she said. "Q will continue to be one of our larger shareholders, as will Neuberger. But we will continue to communicate with both of them."