WILMINGTON, Del. - A shareholder sued the management of Cedar Fair LP, a theme park operator, for agreeing to sell the company too cheaply to Apollo Management and asked a judge to block the deal, according to court documents.
The private equity firm agreed last month to buy Cedar Fair for a total of $2.4 billion, which includes refinancing its debt. Under the deal, shareholders of the Sandusky, Ohio-based company would receive $11.50 in cash for each Cedar Fair Limited Partnership unit they hold.
The lawsuit was brought by Ruth Walton, who owns 30,000 units, on behalf of all public holders of Cedar Fair units. It was filed on Wednesday in Delaware's Chancery Court against the board of Cedar Fair Management Inc, Cedar Fair's general partner.
It says that management agreed to sell amid the worst recession in 70 years, during a breakdown in credit markets and at a time when bad weather had taken a toll on the business, which operates 11 theme parks, seven water parks and five hotels.
The suit criticizes management for failing to conduct a public auction of the business and says the go-shop provision, which allows the company to seek higher offers until Jan. 25, uses restrictions that unfairly favor Apollo.
The suit asks the court to block the deal, or if it is consummated, to rescind it. The suit also seeks damages to be determined at a trial.
Cedar Fair did not immediately return calls for comment.
Cedar Fair LP units were little changed in midday trade at $12.20.
The case is Ruth Walton v Apollo Global Management LLc et al, Chancery Court, State of Delaware, No. 5216. (Reporting by Tom Hals, editing by Matthew Lewis)