Date set to combine Cedar Fair lawsuits
1/22/2010SANDUSKY - An Erie County Common Pleas Court magistrate set a timetable yesterday for lawyers to consolidate lawsuits by shareholders contesting the $2.4 billion purchase offer for Cedar Fair LP by New York private equity firm Apollo Global Management.
Magistrate Steven Bechtel heard arguments from attorneys for Sandusky residents Mary Denslow and John Sprau, who seek details about the deal from Cedar Fair's financial advisers, Guggenheim Securities and Rothschild Inc.
Mr. Bechtel didn't rule on a request by the plaintiffs to have the financial advisers submit to court-ordered questioning. The plaintiffs seek evidence to support their view that the purchase price is too low or other factors that could result in a court order to block an upcoming shareholder vote on the deal.
Instead, Mr. Bechtel requested the lawsuit by Ms. Denslow and Mr. Sprau be combined with nine other lawsuits filed in Erie County since Dec. 17, when Cedar Fair announced it was being acquired. The deal would have Apollo absorb Cedar Fair's $1.6 billion debt and pay shareholders $11.50 a share.
The lead plaintiff in the case, which seeks class-action status, will be Todd Miller, a Cedar Fair shareholder from Indiana, and a team of attorneys will be chosen from firms representing all the clients, the magistrate told The Blade.
An amended lawsuit is to be filed by Tuesday and the amusement park operator has until
Feb. 9 to file a motion to dismiss the litigation.
"We believe these lawsuits are without merit, and we will contest all of them vigorously," Stacy Frole, Cedar Fair's director of industrial relations, said.
No date or location for the shareholder vote has been set. If the deal is finalized, the publicly traded Cedar Fair would go private as part of Apollo Management.
Cedar Fair owns 11 amusement parks and six water parks across the country, but its hallmark sites are Cedar Point in Sandusky and Knott's Berry Farm in Buena Vista, Calif.
Whether the Sandusky firm can get the needed two-thirds of all outstanding shares to vote for the deal is unknown. The company has about 55.2 million outstanding shares or "partnership units."
Its largest institutional shareholder is investment fund Neuberger Berman Group, which holds 4.8 million shares.
Private investors include Stephen R. Knott, 68, grandson of Walter Knott, the founder of Knott's Berry Farm. Knott's was bought by Cedar Fair in 1997.
Mr. Knott, whose family controls about 2 million Cedar Fair shares, said he's uncertain how he will vote. "The sale, we're not really happy with it. We liked Cedar Fair. It is a good company, it had similar values to our company," he said. But Mr. Knott said he doesn't know what Apollo Management will do if the deal passes.
Meanwhile, the deadline is Monday for Cedar Fair to receive counter purchase offers under the terms of the Apollo deal. The northwest Ohio company declined to say yesterday whether it has had any other interested buyers.
Contact Jon Chavez at:
jchavez@theblade.com
or 419-724-6128.