Potential Buyers Study Six Flags

About three dozen prospective buyers have expressed interest in taking over Six Flags Inc., but a dissident shareholder seeking to increase his stake has not entered the auction to buy the entire theme park operator, sources familiar with the situation said Monday.

The potential bidders, many of them private equity firms, have begun to review Six Flags’ confidential financial records, the sources said. Six Flags has a market capitalization of about $674 million and a debt load of more than $2 billion.

In August, Six Flags put itself up for sale after investor Daniel Snyder said he was seeking to replace the company’s chairman and chief executive and raise his stake to 34.9% from 11.7%.

Snyder, owner of the Washington Redskin football team, had offered to pay $6.50 a share to increase his stake in Six Flags, which operates 30 theme parks, offering amusement rides, water attractions and safaris.

Shares of Oklahoma City-based Six Flags rose 15 cents to $7.39.

Last week, Snyder asked Six Flags to set a date to determine which stockholders can vote on a proposal to remove three directors from the company’s board. The board must set a date within 10 days of receiving that request.

The auction for Six Flags comes on the heels of other recent amusement park sales.

This year, private equity firm Blackstone Group bought Legoland, which operates four parks, for $459 million and European park operator Merlin Entertainment for $180 million.

In March, Dubai International Capital, the investment firm backed by the government of Dubai, bought Tussauds Group, known for its Madame Tussauds wax museums, for $1.5 billion.

Wall Street analysts expect Six Flags’ 30 parks to fetch a higher premium than the seven European parks it sold last year to Palamon Capital Partners for about $200 million, or just six times its annual cash flow.

Blackstone has expressed interest in Six Flags but has not determined whether it will submit a bid, sources said.

Palamon and Dubai are also expected to look at Six Flags, but they could be turned off by the company’s debt, analysts have said.

Smaller rival Cedar Fair, which has 12 parks, said it was interested in looking at Six Flags, but it had not had a chance to review the rival’s financial records.

Theme park and resort developer VisionMaker and Los Angeles investor Ron Bension also have expressed interest in Six Flags.