- The Washington Times - Thursday, August 25, 2005

Six Flags’ board of directors yesterday put the company on the auction block and recommended that shareholders reject Washington Redskins owner Daniel Snyder’s plan to take control of the amusement park chain.

Shares in the Oklahoma City company surged 11 percent, or 72 cents, to $7.26 on the New York Stock Exchange following the announcement.

Michael Gellert, presiding independent director of the Six Flags board, said the auction “is the best way to deliver full and fair value to all Six Flags stockholders.”

The company offered no timetable but said the process would be “prompt and orderly.”

Mr. Snyder in an Aug. 17 filing with the Securities and Exchange Commission said he would seek to buy up to 34.9 percent of Six Flags stock for $6.50 a share, and install himself as chairman and appoint two allies to the board. He also asked shareholders to oust Chairman and Chief Executive Kieran Burke and two other directors.

Mr. Snyder’s investment firm, Red Zone LLC, already is the largest Six Flags shareholder. But the Redskins’ owner is at odds with company management over the operation of the amusement park chain, which since 1999 has posted annual losses and a nearly 80-percent drop in its stock.

Mr. Gellert yesterday said Mr. Snyder was “seeking to acquire effective control of the company without providing value to all stockholders.”

At the same time, Six Flags officials invited Red Zone to participate in the auction.

“We view this as [an] attempt by Six Flags management to force Mr. Snyder to enter the auction process and buy the full company outright versus simply gaining management control as the largest shareholder. At this time, we don’t see any other likely bidders in the market,” said Katherine Styponias, an analyst at Prudential Equity Group.

It is not clear whether Red Zone would bid. Karl Swanson, a spokesman for Mr. Snyder, told the Associated Press that the company was waiting for more information.

“We haven’t received any details of the auction,” Mr. Swanson said. “We’ll be happy to see just how they intend to do it.”

Mr. Snyder earlier this month in the SEC filing said he did not want to take a majority stake to avoid exposure to $2.6 billion in company debt.

Red Zone has invested about $49 million in Six Flags since August 2004. Mr. Snyder said the company has underperformed for five years and, since he invested, has not responded to his suggestions to boost attendance and revenue.

Mr. Snyder said he would redesign advertising and marketing campaigns, increase revenue by partnering with vendors to sell brand-name products at the parks, and sell some real estate.

Six Flags, which operates 30 parks in North America, said that for the first six months of 2005, revenue rose 9.9 percent to $440.9 million, compared with the like period of 2004, while attendance climbed 8.5 percent to 1.08 million.

But the company last posted a net profit for a full year in 1998, and attendance had declined for several years.

In 2004, for example, revenue fell 1 percent to $1.04 billion, and attendance dropped 3.4 percent to 33.5 million.

Mr. Snyder faulted Six Flags’ marketing and management strategy, and said his background as owner of the Redskins and in advertising could help turn the park around. Information sent to shareholders said that since he acquired the Redskins in 1999, sponsorship revenues increased from $4 million to $48 million, and annual revenues rose from $162 million to $300 million.

At the same time, Mr. Snyder has not endeared himself to Redskins fans. The team’s record during his tenure is 44-52 and fans have complained about excessive charges, obstructed-view seats at FedEx Field, poor parking arrangements and other annoyances.

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