Washington Redskins owner Dan Snyder, a longtime critic of the management of Six Flags Inc., has begun a proxy contest to gain three of seven seats on the theme park company’s board.
Snyder and his investment firm, Red Zone LLC, also disclosed a plan to acquire a total of up 34.9 percent of the company’s outstanding shares, subject to conditions that include the selection of Snyder as Six Flags’ chairman. Red Zone already owns 11.7 percent of the company’s shares, and would pay $6.50 a share to acquire the additional stake, according to a filing with the Securities and Exchange Commission.
Six Flags shares soared 11.7 percent, or 64 cents, on news of Snyder’s approach in electronic after-hours trading. Earlier, the stock rose 4 cents to close at $5.49 on the New York Stock Exchange.
Snyder said in the filing that although his group isn’t seeking control of the board, the three Snyder nominees — including Snyder himself — would urge the board to replace Chairman and Chief Executive Kieran E. Burke.
Snyder wants to be named chairman to replace Burke, and wants another of his board nominees, Mark Shapiro, to replace Burke as the company’s CEO. Shapiro is executive vice president, programming and production, at The Walt Disney Co.’s ESPN sports channel.
Six Flags is one of the world’s largest amusement and water park operators, with 28 U.S. parks and one each in Canada and Mexico.
After the filings by Red Zone on Wednesday, Oklahoma City-based Six Flags released a statement saying that its board “will carefully consider and evaluate Red Zone’s filings and will communicate with Six Flags’ stockholders in due course.”
Snyder said he isn’t seeking control of the company outright because the structure of the company’s debt effectively acts as a poison pill. The $2.6 million in debt — which Snyder described as “poison debt” — permits holders to accelerate repayment or require the company to repurchase securities if Snyder’s group or any other obtains a majority on the board.
However, Snyder is trying to use the tender offer to oust Burke. Among the conditions for Snyder’s group to follow through on the offer, the company would have to name Snyder chairman and Shapiro chief executive.
Snyder is also seeking to have the company remove restrictions, including a poison pill, that would keep his group from making the tender offer.
Snyder first began publicly complaining about Six Flags’ management last August, when he disclosed that he had acquired 8.76 percent of the company’s shares. Snyder argued that management had failed to take advantage of opportunities to increase revenue and decrease expenses.
Shortly after Snyder’s disclosure, Cascade Investment LLC, the investment vehicle for Microsoft Corp. co-founder Bill Gates, also publicly expressed dissatisfaction with the company’s management.
As of June 30 this year, Cascade Investment reported holding 10.2 million Six Flags shares. Snyder’s group has reported holding 10.9 million shares.
Snyder is seeking to oust Burke, finance chief James Dannhauser and Stanley Shuman from the company’s board. Besides Snyder and Shapiro, Red Zone is nominating Dwight Schar, chairman of homebuilder NVR Inc. to the Six Flags board.