Topic: Growth Stocks

The Wall Street Stock Forecaster Hotline – Friday, April 9, 2010

Article Excerpt

CEDAR FAIR L.P., $14.11, New York symbol FUN, owns 11 amusement parks, six outdoor water parks, one indoor water park and five hotels, mostly in the midwestern and northeastern U.S. The stock rose 17% this week. That’s because Cedar Fair has cancelled a friendly, $11.50-a-unit takeover offer from private-investment firm Apollo Global Management. Many unitholders thought that price was too low, so this move raises the possibility of a higher bid. Cedar Fair will pay Apollo $6.5 million in cancellation fees. To put this figure in context, Cedar Fair earned $35.4 million, or $0.63 a unit, in 2009. The partnership has also adopted a unitholder-rights plan. These types of plans are often called “poison pills,” because they aim to thwart hostile takeovers. They do this by letting unitholders buy new units at a discount if someone tries to buy more than 20% of a company’s outstanding units. Increasing the number of outstanding units makes a takeover more expensive. The rights plan expires…

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