Largest Cedar Fair Unitholder Believes Separating Chairman and CEO Roles, Providing Meaningful Distribution are Critical to Reversing Underperformance
FORT WORTH, Texas — Q Investments, which owns approximately 18 percent of Cedar Fair, L.P.’s units, sent a letter to the Company’s unitholders today urging them to support two measures it believes will serve as meaningful steps toward reversing the Company’s prolonged financial and market underperformance.
The letter calls on Cedar Fair’s unitholders to vote FOR two proposals at the Company’s upcoming Special Meeting of Unitholders on January 11, 2011. The first proposal would separate the roles of Chairman and CEO, and the second would reinstate what it terms a “meaningful” distribution to unitholders. Q Investments made the following points in support of both proposals:
- Cedar Fair’s stock price has underperformed both the broader market and, recently, Six Flags during Richard Kinzel‘s seven-year tenure as Chairman and CEO.
- Mr. Kinzel openly professes to not being “a finance person.” Q Funding believes installing an independent Chairman with financial expertise would help Cedar Fair avoid repeating its recent mistakes and benefit unitholders over the long term.
- It also would infuse some much-needed new thinking into a Board whose members on average have served for more than a decade and who have overseen the Company’s underperformance in recent years.
- In today’s environment, this is simply good corporate governance.
- As stated in the letter, the Company’s Unit price falls when distributions are reduced. Q Funding believes the Company can easily afford to pay a $1.00 per Unit distribution to unitholders, leaving it with about $50 million of annual free cash flow to pay down debt in a normalized environment.
[Cedar Fair’s board of directors responded by sending a letter to unitholders urging them to reject the proposals from Q Funding.]
Full text of letter from Q Funding can be found here.
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