NEW YORK (AP) _ Six Flags Inc. stock rose Thursday after the amusement-park company's largest shareholder moved to increase its stake, oust top management and make a series of changes.
Shares of Six Flags rose 98 cents, or 18 percent, to $6.47 on the New York Stock Market. Shares traded as high as $6.61, above the 52-week high of $6.15 set Sept. 1.
Dan Snyder, owner of the Washington Redskins football team, made a tender offer through his Red Zone LLC investment firm to buy up to 34.9 percent of the company's stock. To increase Red Zone's stake from a current 11.7 percent, it is offering to pay $6.50 a share for the larger stake.
However, that tender is dependent on Snyder capturing three board seats, including one for himself and one for Red Zone Chief Executive Mark Shapiro _ former programming and production executive at Walt Disney Co.
Snyder is seeking to oust Six Flags Chief Executive Kieran Burke and Chief Financial Officer James Dannhauser.
Bear Stearns analyst R. Glen Reid upgraded the stock to ``peer perform'' from ``underperform,'' citing Snyder's offer and his persistence in calling for changes as well as the improved summer season that Six Flags is experiencing.
After adding attractions at 13 of its 18 theme parks in the last year, Six Flags saw second-quarter earnings of 6 cents a share, better than the year-ago loss of 13 cents and analyst expectations for earnings of 4 cents. The company projected 2005 revenue growth of 8.5 percent and said it was poised for strong growth for the rest of the year with attendance, guest spending and season-pass sales all above year ago levels.
Reid pointed out in a research note that Snyder wants to brand Six Flags differently, redesigning the advertising and marketing and creating new partnerships and sponsor relationships. Snyder also wants to sell some of the company's real estate.
Shareholders have a choice of selling into Thursday's rally in the stock, assume Snyder will be successful and sell to him at $6.50 under the tender, or wait to see if Snyder will raise offer, said Sanders Morris Harris Group analyst David Miller.
``Six Flags is having a darn good season and investors have to figure out if Snyder can do better,'' he said.
Miller kept his ``buy'' rating on the stock and price target of $7.50 a share, citing the easy comparison with a weak 2004 season, the attendance and spending gains at the parks, the company's attractive valuation and balance sheet.
Bear Stearns has an investment-banking relationship with Six Flags but Reid wasn't listed as a shareholder. Sanders Morris doesn't have an investment banking relationship with Six Flags and Miller doesn't own the stock.