NEW YORK (AP) _ Oklahoma City-based Six Flags Inc. on Thursday said its board has unanimously decided to put the company up for sale through an auction process, one week after Washington Redskins owner Dan Snyder bid to raise his stake in the amusement-park operator and oust Kieran Burke as chairman and CEO.
Shares of Six Flags, the world's second-largest theme-park operator behind Disney, rose 8.6 percent to $7.10 in early trading on the New York Stock Exchange. At that price, the company's market capitalization is roughly $661 million.
Six Flags said it would invite dissident shareholder Red Zone LLC _ an investment firm controlled by Snyder _ to participate in the auction. But it also said it opposed Snyder's attempt to gain control of the company through a tender offer for Six Flags stock.
Last Thursday, Red Zone said in a letter to shareholders it sought to boost its stake to 34.9 percent from a current 11.7 percent, and would offer $6.50 per share _ valuing the entire company at about $605.2 million. However, the tender offer is contingent upon the replacement of Burke and Chief Financial Officer James Dannhauser.
Six Flags said putting itself up for sale was ``the best way to deliver full and fair value'' to shareholders, particularly given Red Zone's proposal, which it called an attempt to wrest control of the company without providing value to all shareholders.
Under Snyder's plan, Mark Shapiro _ former programming and production executive at Walt Disney Co. _ would become CEO of Six Flags, while Snyder would become chairman. Snyder has also proposed increasing the number of board members.
In order to avoid triggering Six Flags' ``poison pill'' plan _ a provision companies use to avoid hostile takeover battles _ Snyder has sought only to boost his stake in the company and hasn't bid for full ownership. His proposals must be supported by half of the company's shareholders in order to circumvent the poison pill rules.
Six Flags' stock price has vaulted nearly 37 percent since Red Zone first disclosed its intent to raise its stake in the company.
The company reported a profit in its second quarter ended in June, but has posted annual losses since 1999.