The regional amusement park chain has a new CEO and no willing buyers.
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By Rick Aristotle Munarriz
Updated: 10:01 a.m. ET Dec. 14, 2005
Remember when the top brass at Six Flags(NYSE: PKS) was telling shareholders not to vote for a boardroom shakeup because it was about to present investors with buyout offers? Apparently that was the last bluff in Kieran Burke's poorly played hand.
Daniel Snyder and his cronies won the coveted board seats two weeks ago and today conceded that the company had not received any firm purchase proposals. With $2.1 billion in debt hogtied to the company's shares, even an offer of pocket lint and an Altoids tin would have been a heavy burden to a potential purchaser.
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Six Flags shares may have opened 5% lower this morning, but it really is the best thing that could have happened for the company. Today, Mark Shapiro takes over as CEO. As Snyder's choice, Shapiro comes to the helm having worked for the greatest theme park operator around, Disney(NYSE: DIS). Even though Shapiro was an executive at Disney's ESPN -- far removed from the Disney resorts -- he still gets the leisure and entertainment industries. Snyder does too, judging by his success in drawing sellout crowds to Washington Redskins games despite the team's mediocre performance over the years.
This doesn't mean that Clinton Portis or Santana Moss will be the new spokesmen for Six Flags. However, once the speculators have moved on and the share price has settled, you may be tempted to nibble at Six Flags as an investment.
Why? When the two most important board members at the company know more about yellow penalty flags than the six flags waving at the thrill park chain's entrance? Well, the important thing here is that change is coming. There is so much untapped potential, and the stagnancy that has saddled the chain has been disgraceful, considering that the debt payments have loomed so large. Time really was money and the old brass squandered both.
Things were starting to come around this year. Attendance and per capita spending were climbing nicely at its parks. EBITDA will grow by at least 16% this year. Six Flags had turned to outside consultants at some of its parks, and that was clearly starting to bear fruit. Now it will be Shapiro's job to keep the momentum going and build on it until Six Flags is able to grow to the point where it can tackle its bottom-heavy balance sheet.
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