Franklinnoble
08-31-2004, 03:15 PM
Redskins owner buys into Six Flags
Joins Bill Gates as a major shareholder in the beleaguered theme park concern; both call for change.
August 31, 2004: 3:30 PM EDT
LOS ANGELES (Reuters) - The owner of the Washington Redskins football team has bought an 8.8 percent stake in Six Flags Inc., saying he wants change. Microsoft's Bill Gates also said he owns a big stake and may work with other investors to improve results at the theme park operator.
Shares of Six Flags Inc. (http://cgi.money.cnn.com/mgi/mgi_search?QUERY=PKS) (PKS (http://money.cnn.com/quote/quote.html?shownav=true&symb=PKS): up $1.11 to $5.57, Research (http://cnnfn.multexinvestor.com/Reports.aspx?ticker=PKS), Estimates (http://cgi.money.cnn.com/firstcall/fc?ticker=PKS)), under pressure for weeks due to slipping attendance, rose more than 20 percent Tuesday. They have fallen by nearly half from their 52-week high in March of $8.80. They traded above $41 in May 1999.
Redskins owner Daniel Snyder said in a Monday filing with the Securities and Exchange Commission that he has bought 8.15 million Six Flags shares for about $34.5 million since Aug. 11 and may buy more.
He said he hopes to influence management to maximize the amusement park operator's value, perhaps through a merger or sale, and he may also seek a seat on the Oklahoma City-based company's board.
Gates, founder and chairman of Microsoft Corp (http://cgi.money.cnn.com/mgi/mgi_search?QUERY=MSFT) (MSFT (http://money.cnn.com/quote/quote.html?shownav=true&symb=MSFT): Research (http://cnnfn.multexinvestor.com/Reports.aspx?ticker=MSFT), Estimates (http://cgi.money.cnn.com/firstcall/fc?ticker=MSFT)), said in a separate filing Tuesday that he had owned Six Flags shares for years and was dissatisfied with the company's recent performance.
Gates controls 11.5 percent of the stock and may discuss strategy with other investors, management and the board, he said. He also said he might work with other investors to nominate a director.
Snyder made his filing through a vehicle called Red Zone LLC. The "red zone" in American football is the area between the defense's 20-yard line and the goal line.
"Management has failed to implement measures to increase revenues and decrease expenses, and its failure to do so has caused the company to be continuously outperformed by its peers," the filing said.
Red Zone, the filing said, "may encourage the company to maximize stockholder value through a possible merger, sale of the company's assets, consolidation, business combination or a recapitalization or refinancing."
Snyder is not known as a shareholder activist.
The Wall Street Journal, citing unidentified people close to him, on Tuesday said Snyder believes he can help turn Six Flags around by revamping its marketing. They said this could involve putting logos, videos and product displays in parks, and issuing Six Flags coupons elsewhere.
Gates' Cascade Investment on Tuesday said it owned 10.8 million shares of Six Flags and may discuss with other investors the possibility of nominating a board member.
Six Flags was not immediately available for comment. The company is the world's largest regional theme park operator, with 31 parks in North America and Europe, including parks in 15 U.S. states.
Forbes magazine last September put the Redskins franchise's value at $952 million, top among the 32 National Football League teams. The team in 2003 posted a 5-11 won-lost record.
<center>Attendance slows</center> Many theme park operators have been hurt by declining travel after the Sept. 11 attacks.
Earlier this month, Six Flags posted a second-quarter loss of $12.8 million, or 13 cents per share. Revenue fell 1 percent from a year earlier to $356.4 million while attendance fell 4 percent. The company also forecast full-year revenue that fell short of analysts' forecasts.
On Aug. 20, Standard & Poor's cut Six Flags' credit rating to "B," its fifth-highest junk grade, with a negative outlook, affecting $2.48 billion of debt and preferred stock. Six Flags' market capitalization is about $415 million, based on Monday's closing price.
S&P said Six Flags, facing a lack of major new rides and a "weak" operating environment, will be forced to discount tickets and spend on marketing to generate more attendance. http://i.cnn.net/money/images/bug.gif (http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Redskins+owner+buys+Six+Flag+stake%3B+Gates+weighs+in+-+Aug.+31%2C+2004&expire=&urlID=11504597&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2004%2F08%2F31%2Fnews%2Fnewsmakers%2Fsix_flags.reut%2F&partnerID=2200#TOP)
Joins Bill Gates as a major shareholder in the beleaguered theme park concern; both call for change.
August 31, 2004: 3:30 PM EDT
LOS ANGELES (Reuters) - The owner of the Washington Redskins football team has bought an 8.8 percent stake in Six Flags Inc., saying he wants change. Microsoft's Bill Gates also said he owns a big stake and may work with other investors to improve results at the theme park operator.
Shares of Six Flags Inc. (http://cgi.money.cnn.com/mgi/mgi_search?QUERY=PKS) (PKS (http://money.cnn.com/quote/quote.html?shownav=true&symb=PKS): up $1.11 to $5.57, Research (http://cnnfn.multexinvestor.com/Reports.aspx?ticker=PKS), Estimates (http://cgi.money.cnn.com/firstcall/fc?ticker=PKS)), under pressure for weeks due to slipping attendance, rose more than 20 percent Tuesday. They have fallen by nearly half from their 52-week high in March of $8.80. They traded above $41 in May 1999.
Redskins owner Daniel Snyder said in a Monday filing with the Securities and Exchange Commission that he has bought 8.15 million Six Flags shares for about $34.5 million since Aug. 11 and may buy more.
He said he hopes to influence management to maximize the amusement park operator's value, perhaps through a merger or sale, and he may also seek a seat on the Oklahoma City-based company's board.
Gates, founder and chairman of Microsoft Corp (http://cgi.money.cnn.com/mgi/mgi_search?QUERY=MSFT) (MSFT (http://money.cnn.com/quote/quote.html?shownav=true&symb=MSFT): Research (http://cnnfn.multexinvestor.com/Reports.aspx?ticker=MSFT), Estimates (http://cgi.money.cnn.com/firstcall/fc?ticker=MSFT)), said in a separate filing Tuesday that he had owned Six Flags shares for years and was dissatisfied with the company's recent performance.
Gates controls 11.5 percent of the stock and may discuss strategy with other investors, management and the board, he said. He also said he might work with other investors to nominate a director.
Snyder made his filing through a vehicle called Red Zone LLC. The "red zone" in American football is the area between the defense's 20-yard line and the goal line.
"Management has failed to implement measures to increase revenues and decrease expenses, and its failure to do so has caused the company to be continuously outperformed by its peers," the filing said.
Red Zone, the filing said, "may encourage the company to maximize stockholder value through a possible merger, sale of the company's assets, consolidation, business combination or a recapitalization or refinancing."
Snyder is not known as a shareholder activist.
The Wall Street Journal, citing unidentified people close to him, on Tuesday said Snyder believes he can help turn Six Flags around by revamping its marketing. They said this could involve putting logos, videos and product displays in parks, and issuing Six Flags coupons elsewhere.
Gates' Cascade Investment on Tuesday said it owned 10.8 million shares of Six Flags and may discuss with other investors the possibility of nominating a board member.
Six Flags was not immediately available for comment. The company is the world's largest regional theme park operator, with 31 parks in North America and Europe, including parks in 15 U.S. states.
Forbes magazine last September put the Redskins franchise's value at $952 million, top among the 32 National Football League teams. The team in 2003 posted a 5-11 won-lost record.
<center>Attendance slows</center> Many theme park operators have been hurt by declining travel after the Sept. 11 attacks.
Earlier this month, Six Flags posted a second-quarter loss of $12.8 million, or 13 cents per share. Revenue fell 1 percent from a year earlier to $356.4 million while attendance fell 4 percent. The company also forecast full-year revenue that fell short of analysts' forecasts.
On Aug. 20, Standard & Poor's cut Six Flags' credit rating to "B," its fifth-highest junk grade, with a negative outlook, affecting $2.48 billion of debt and preferred stock. Six Flags' market capitalization is about $415 million, based on Monday's closing price.
S&P said Six Flags, facing a lack of major new rides and a "weak" operating environment, will be forced to discount tickets and spend on marketing to generate more attendance. http://i.cnn.net/money/images/bug.gif (http://cnnmoney.printthis.clickability.com/pt/cpt?action=cpt&title=Redskins+owner+buys+Six+Flag+stake%3B+Gates+weighs+in+-+Aug.+31%2C+2004&expire=&urlID=11504597&fb=Y&url=http%3A%2F%2Fmoney.cnn.com%2F2004%2F08%2F31%2Fnews%2Fnewsmakers%2Fsix_flags.reut%2F&partnerID=2200#TOP)