A group led by Washington Redskins owner Dan Snyder said late Tuesday it has lined up enough shareholder votes to oust three board members and assume control of amusement park operator Six Flags Inc.
Red Zone LLC, Snyder’s investment group, said it has delivered written consents representing more than 57 percent of Six Flags’ outstanding common stock, which would be sufficient to oust three members of the seven-member board of the Oklahoma City-based amusement park operator. A majority of the new board would then have to vote to replace the current management team.
“I want to thank Six Flags’ stockholders for their confidence in Red Zone and my fellow nominees,” Snyder said in a statement contained in a Securities and Exchange Commission filing Tuesday.
Six Flags officials, responding in a news release to the announcement, said the consents still must be verified by an independent auditor.
Red Zone plans to dump Six Flags CEO Kieran Burke and other top officers and replace them with its own slate of nominees. Snyder wants to be Six Flags’ chairman and bring aboard former ESPN executive Mark Shapiro as the company’s new CEO. They say they would then shed some properties and revamp the company’s advertising and marketing strategies to boost shareholder returns.
The announcement was made after the close of markets Tuesday. Shares of Six Flags fell 14 cents, or 1.8 percent, to close at $7.46 in trading on the New York Stock Exchange, down from a new 52-week high of $7.74 during the session. The stock rose 4 cents in after-hours trading.
Six Flags, which touts itself as the world’s largest regional theme park operator, had suffered years of declines in attendance and revenues until this year, when revenues increased 9.5 percent and attendance jumped 5.6 percent over the first three quarters. The company also has $2.1 billion in long-term debt, according to its most recent financial report.
Snyder, who holds about 11.7 percent of the company’s stock, launched a proxy battle against Six Flags in August, aiming to replace Burke with Shapiro and remove Chief Financial Officer James Dannhauser and board member Stanley Shuman. Snyder and Shapiro would join the board, along with Virginia homebuilder Dwight C. Schar.
Six Flags responded by putting itself up for auction. In a conference call Monday with shareholders, Burke said Six Flags had received a “number of financial and strategic bidders.” He declined to reveal the number or the names of bidders.
“We are, in fact, going to protect the integrity of that process,” Burke said. “It is on track. We frankly have just two to three weeks to go when we’ll have our final bids.”
But Robert McCormick, vice president of proxy research and operations for Glass, Lewis and Co., said Snyder’s announcement could chill a potential sale of the company.
“I don’t want to underestimate the importance of this large return on the vote they’ve announced already. That’s a pretty significant vote and it’s pretty rare,” McCormick said.
“There’s a strong feeling among shareholders that either current management is not in a strong position to run the company or they are not the ones in the best position to determine the best possible price for the company. That’s kind of the tricky part — to determine exactly what the shareholders are thinking.”
Six Flags runs 30 theme parks in North America. It has corporate offices in Oklahoma City and New York.