Six Flags' CEO asks investors to back board, sale
Tuesday, November 8th 2005, 2:37 pm
By: News On 6
NEW YORK (Dow Jones/AP) _ Six Flags Inc. Chairman and Chief Executive Officer Kieran Burke again urged investors not to support a group seeking to take over the board and instead wait for Six Flags to finish the process of selling the company.
During a conference call Tuesday to discuss third-quarter results, Burke said that a number of capable financial and strategic buyers had emerged and the company expected final bids in early December.
``I am confident that we will have an attractive transaction to recommend to shareholders by the end of December,'' Burke said.
The Oklahoma City-based theme park operator put itself up for sale in August after Red Zone LLC, an investment vehicle of Washington Redskins owner Dan Snyder, began an effort to replace Burke and two other board members with his own candidates.
Red Zone, which holds about 11 percent of Six Flags' stock, is seeking shareholder consent to remove Burke and fellow directors Stanley Shuman and Chief Financial Officer James Dannhauser.
Snyder, former ESPN president of programming and production Mark Shapiro _ now Red Zone's chief executive _ and Dwight Schar, chairman of home builder NVR Inc. would then be named to the board.
Last week, Diaco Investments LP, which owns about 9.8 percent of Six Flags stock, threw its support behind Red Zone, saying that it opposed a sale of the company.
If he won shareholder approval for his plan, Snyder would pay about $6.50 a share for 22 million Six Flags shares for Red Zone to have a 35 percent stake _ but only if the stock were trading at or under $6.50 a share.
Shares of Six Flags fell 8 cents, or 1.1 percent, to $7.31 in afternoon trading Tuesday on the New York Stock Exchange.
Burke again said that Snyder was trying to gain control of Six Flags without paying a premium for the shares.
Snyder said in a filing with the Securities and Exchange Commission that buying the company would be prohibitively expensive. He added that he thought it would be difficult for Six Flags to be sold, considering its debt load of about $2.2 million, as well as the payments to executives triggered by a change of control.
Late Monday, Six Flags posted third-quarter income of $195.6 million, or $1.29 a share, up from $56.4 million, or 53 cents a share, a year earlier. Wall Street expected $1.20 a share, according to a survey of four analysts by Thomson First Call.
Revenue for the quarter ended Sept. 30 rose 9.8 percent to $559 million from $509 million a year ago.