CLEVELAND — Cedar Point's parent company Cedar Fair and Six Flags are expected to merge, pending Department of Justice approval. But not everyone wants that to happen.
For example, a Cedar Point fan posted in the Cedar Point Uncensored Facebook group that he hopes shareholders can stop the deal.
THE CLAIM
So today, we’re VERIFYING the answer to the question, "Can Cedar Fair shareholders stop the merger with Six Flags from happening?"
THE SOURCES
We checked with the following sources:
- Case Western Reserve University School of Law professor Anat Alon-Beck
- Delaware merger law 8 DE Code § 251 (2022)
- U.S. Securities and Exchange Commission (SEC) filings
- Cedar Fair's Partnership Agreement
- Cedar Fair spokesperson statement
THE EXPLANATION
First, you should know that Cedar Fair calls their shareholders "unitholders." Both terms mean the same thing, but we'll use the term shareholders here except when we're quoting a document.
Now, Law Professor Anat Alon-Beck confirmed for us that Delaware law controls the rules for this merger, because both Cedar Fair and Six Flags are incorporated there. She showed us that under Delaware law, the board of directors of each business in a merger both have to vote to approve it, but there are certain exceptions to requiring shareholders of both of those companies to have to vote to approve it, as well.
Cedar Fair's Partnership Agreement could have required a shareholder vote for this merger if the merger would have resulted in change of control, but as a Cedar Fair spokesperson explained it, "Given Cedar Fair unitholders will maintain more than 51% ownership of the combined company, the transaction does not require a unitholder vote in accordance with the terms of the Cedar Fair Partnership Agreement."
A filing with the SEC explains it further, saying, "Approval by Cedar Fair unitholders is not required. Six Flags' largest shareholder … has signed a voting and support agreement to vote in favor of the transaction."
THE ANSWER
So we can VERIFY the answer to the question "Can Cedar Fair shareholders stop the merger with Six Flags from happening?" is no. Six Flags shareholders do have to vote to approve this merger because they're technically the company being acquired here, but because of the way this merger is structured, Cedar Fair shareholders don't get a vote.
If you have something you'd like to be verified, please email the claim or question to verify@wkyc.com or text it to (216) 344-3300.