Cedar Fair to expand board

SANDUSKY - A desire by Cedar Fair LP's largest shareholder to get "new blood" on its seven-member board of directors has resulted in an agreement in which two directors will be added to the board after the company's June 7 annual shareholders meeting.

At the 2011 meeting, two current board members will lose their seats, putting the board back to seven members, according to the plan announced jointly yesterday by the Sandusky amusement park chain and Q Investments, a pair of Texas investment funds that hold 18.1 percent of Cedar Fair's stock.

The company and Q Investments, which became the largest shareholder in February, seemingly had been on different paths regarding the board.

Q Investments stated it wanted to nominate two new, independent candidates to the board and had hired an executive search firm, Spencer Stuart, to find a suitable list.

But Friday, Cedar Fair filed its proxy statement for the June meeting and recommended the re-election of board members Richard Ferriera and C. Thomas Harvie.

Q Investment officials had threatened a possible proxy fight and filed a court action in the state of Delaware, where Cedar Fair is incorporated, asking for a ruling upholding its right to nominate new board members.

Stacy Frole, Cedar Fair director of investor relations, said the two sides were never in dispute. The parties had a private dialogue on how to resolve the board member issue.

Under the pact with Q Investments, two candidates from Spencer Stuart's list will be appointed to the board after the annual meeting. Ms. Frole said the list is not yet available and no timetable has been set.

Both Cedar Fair and Q Investments must agree on the two people chosen, otherwise, each can select one person from the list.

At the 2011 meeting, the board will be reduced to seven, but Ms. Frole said there's no decision yet on which current board members will lose their seats.

Meanwhile, Q Investments has agreed to drop its lawsuit.

Scott McCarty, portfolio manager at Q Investments, said in a statement, "We believe Cedar Fair is a company with significant opportunities. We welcome the opportunity to help identify additional directors who can help management to progressively realize this potential in 2010 and beyond."

Q Investments helped unravel a planned takeover of Cedar Fair by Apollo Global Management LLC. The $3.4 billion deal announced in December was deemed to be too low in the $11.50-a-share compensation to Cedar Fair shareholders by Q Investments.

The mutual funds voted against the deal and urged others to do so.

In the face of stockholders' apparent rejection of the deal, Cedar Fair and Apollo announced the purchase was off just before a planned shareholder vote last month.

Subsequently, Q Investments said it wanted to talk to Cedar Fair management about the future of the firm.

- Jon Chavez