Six Flags Response: We're For Sale

Today, Six Flags, Inc. (NYSE: PKS) announced that its Board of Directors has unanimously determined to seek proposals from third parties regarding a possible sale of the company, and will invite Red Zone LLC to participate in the purchase of the company.  (A copy of the Press Release can be found here.)

This move by the Board of Directors is in response to Dan Snyder's Red Zone LLC and its solicitation for a partial tender offer of Six Flags shares.  (Previous post regarding the tender offer can be found here).

The Board also unanimously determined to oppose Red Zone's attempt to gain effective control of Six Flags through its tender offer.

Michael Gellert, the presiding independent director of Six Flags' Board, stated that pursuing a sale is "the best way to deliver full and fair value to all Six Flags stockholders. . . ."  Gellert also stated that he hopes that Red Zone does not "take any action which would impede our ability to maximize value for all stockholders."

The company noted, and some analysts agree (Reuters report here), that there can be no assurance that any sale or other transaction will result from the sale effort.  Reuters is reports that Matthew Harrigan, an analyst with Janco Partners Inc, said that "potential buyers would be few and far between" and he ruled out Walt Disney Co. (NYSE: DIS).

Lehman Brothers and Allen & Company LLC are serving as finanical advisors and Weil, Gotshal & Manges LLP is serving as legal advisor to Six Flags.  Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor to Six Flags' independent board.

As a result of the report, Six Flags shares are up 66 cents a share or nearly 10% to 7.20, which is 70 cents higher than the tender offer from Snyder's Red Zone LLC.  The response of Six Flags to an unwanted offer from Red Zone -- to put the company up for auction -- is responsible and reflects a new approach from the 80s and 90s when an all-out defense would have been the likely approach.