Redskins owner finalizes takeover plans of Six Flags Inc.
Saturday, September 17th 2005, 11:17 am
By: News On 6
OKLAHOMA CITY (AP) _ Washington Redskins owner Dan Synder finalized plans to take control of Oklahoma City-based Six Flags Inc., renewing his call for a change in leadership at the company.
In a revised proxy filing on Friday, Snyder asked the theme-park chain's shareholders to back his slate of nominees to the board of directors and dump top Six Flags executives Kieran Burke and James Dannhauser, as well as director Stanley Shuman.
Six Flags put itself up for sale last month in what analysts said was an attempt to stifle Snyder's takeover plans. This week, the company said it planned to close its AstroWorld park in Houston and sell the prime real estate to developers.
Snyder said that move would delay his impending offer to shareholders, who should have an opportunity to vote on his proposals before the company starts selling off assets.
Snyder also said the Six Flags has put in place a $170 million hurdle for potential buyers of the company.
``We believe it is unlikely that a buyer would emerge who will be able to offer an attractive price for your shares given the company's heavy debt load ... golden parachutes and other substantial additional costs that would be triggered upon a change in control,'' Snyder said in a letter to shareholders.
He estimated those costs could reach $170 million, or the equivalent of $1.82 per share.
``In our view, a new management team with a new operational plan should be given the opportunity to fix Six Flags so that stockholders can realize maximum value. ... Now is not the time to sell the company! It is time to put our nominees on the board!'' the letter stated.
Six Flags spokesman Jeremy Jacobs called Snyder's sale costs an ``overestimation'' but declined to release Six Flags' own calculations. There are associated costs in any transaction, he said.
``We're fully committed to our sales process, which the board believes is the best way to deliver full and fair value to all stockholders,'' Jacobs said. ``We've already attracted interest from potential financial and strategic acquirers and believe that Red Zone's proposed action could concern potential buyers and disrupt the sales process.''
Snyder's investment firm, Red Zone LLC, owns 11.7 percent of Six Flags shares. He wants to offer $6.50 a share to buy another 22 percent of the company, bringing his stake to almost 35 percent. Anything beyond that would trigger provisions in Six Flags preferred shares and the early repayment of debt, which stands at more than $2.2 billion.
Snyder wants shareholders to remove the company's so-called ``poison pill'' provisions and install him as chairman of the board. He also wants former ESPN programming executive Mark Shapiro to be chief executive officer and Virginia homebuilder Dwight Schar as director.
Six Flags said if Red Zone was serious, it would bid on the company and not try to take control with just a 35 percent stake.
``We reiterate that they are welcome to participate on the same terms as other interested bidders, should they have a legitimate interest in pursuing an acquisition of the entire company,'' Jacobs said.