In a significant development in the leisure industry, Cedar Fair (NYSE:FUN) and Six Flags (NYSE:SIX) Entertainment Corporation have announced their decision to merge, forming a formidable amusement park operator with an expanded footprint. The merger agreement, proposing a "merger of equals," has been approved by the Boards of Directors of both companies.
The transaction is based on a pro forma enterprise value of $8 billion, taking into account debt and equity values as of October 31, 2023. Under the terms of the agreement, Cedar Fair unitholders will receive one share in the new company for each unit owned. Meanwhile, Six Flags shareholders will receive 0.5800 shares per share owned, adhering to the Six Flags Exchange Ratio.
Following the completion of the transaction, Cedar Fair unitholders and Six Flags shareholders are expected to own approximately 51.2% and 48.8% of the fully diluted share capital, respectively. This suggests a near-equal stake in the combined entity for both sets of shareholders.
In addition to the stock exchange, Six Flags will declare a special cash dividend of $1.00 per outstanding share. This is further supplemented by another amount that is contingent on the closing of the transaction.
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