Snyder wins vote fight at Six Flags

Redskins owner seeks control of company

November 23, 2005|By BLOOMBERG NEWS

NEW YORK -- Washington Redskins owner Daniel Snyder won a proxy vote to oust Six Flags Inc. Chief Executive Officer Kieran E. Burke and two directors from the company's board yesterday, moving a step closer to taking control of the company.

Six Flags shareholders owning 57 percent of the company's stock voted to remove Burke, who is also chairman, president and chief operating officer of the Oklahoma City company, and Chief Financial Officer James F. Dannhauser and director Stanley Shuman, according to Red Zone LLC, a company controlled by Snyder.

Red Zone said it had received consents to appoint Snyder, Mark Shapiro and Dwight Schar to the board. It also said it sued Six Flags in Delaware Chancery Court to ensure the three board members are removed and the new members are installed.

Six Flags' largest stockholder with a 12 percent holding, Snyder offered $6.50 a share, or $140.4 million, in August to almost triple his stake to 34 percent.

In response, Six Flags said yesterday that Snyder was trying to take control without paying "full value," and put itself up for sale, urging shareholders to reject Snyder's bid.

The company's market value is $699.2 million.

"The new management will be able to increase the profitability of the brand over time as opposed to trying to do a fire sale at a time when there is pressure," said Howard Alter, chairman of Princeton, N.J.-based Alter Asset Management Inc., which owns 265,000 shares of Six Flags in its $150 million under management.

"The fact that they were able to get the vote is a clear sign from a lot of the investors that time was really up in terms of existing management," Alter said.

Snyder's offer for the shares becomes active if the stock trades at or below $6.50 for five consecutive days within 90 days of the certification of the new board members. The stock has been above $6.50 since Aug. 24.

The company said last week that it expects to receive final bids for the company in early December and remains "confident" that it will have a deal by year's end.

Six Flags may sell for $652 million to $838 million, or $7 to $9 a share, Diane Jaffee, a money manager at Trust Company of the West in New York, said Nov. 11. Her firm owns 1.45 million Six Flags shares among $8 billion of assets.

Last week, Institutional Shareholder Services, the largest proxy advisory firm, recommended that Six Flags holders back Snyder's bid to remove the directors and increase his stake. Red Zone wants to replace Burke as CEO with Shapiro, who is chief executive of Red Zone. Schar is chairman of NVR Inc.

Six Flags shares fell 14 cents to close at $7.46 yesterday on the New York Stock Exchange.

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