Daniel Snyder, owner of the Washington Redskins football team, bought an 8.8 percent stake in Six Flags Inc. and said he hopes to influence management to maximize the amusement park operator's value, perhaps through a merger or sale, a securities filing shows.
In a Monday filing with the U.S. Securities and Exchange Commission, Snyder said he has bought 8.15 million Six Flags shares for about $34.5 million since August 11 and may buy more. He said he may also seek a seat on the Oklahoma City-based company's board.
Snyder made his filing through a vehicle called Red Zone LLC. The "red zone" in American football is the area between the defense's 20-yard line and the goal line.
"Management has failed to implement measures to increase revenues and decrease expenses, and its failure to do so has caused the company to be continuously outperformed by its peers," the filing said.
Red Zone, the filing said, "may encourage the company to maximize stockholder value through a possible merger, sale of the company's assets, consolidation, business combination or a recapitalization or refinancing."
Six Flags did not immediately return a call seeking comment. The company has said it is the world's largest regional theme park operator, with 31 parks in North America and Europe, including parks in 15 U.S. states.
Six Flags shares closed Monday at $4.46, near their all-time low of $3.36 reached on August 10. The shares have fallen by nearly half from their 52-week high in March of $8.80. They once traded above $41, in May 1999.
Forbes magazine last September put the Redskins franchise's value at $952 million, top among the 32 National Football League teams. The team in 2003 posted a 5-11 won-lost record.
Many theme park operators have been hurt by declining travel after the Sept. 11 attacks.
Earlier this month, Six Flags posted a second-quarter loss of $12.8 million, or 13 cents per share. Revenue fell 1 percent from a year earlier to $356.4 million while attendance fell 4 percent. The company also forecast full-year revenue that fell short of analysts' forecasts.
On August 20, Standard & Poor's cut Six Flags' credit rating to "B," its fifth highest junk grade, with a negative outlook, affecting $2.48 billion of debt and preferred stock. Six Flags' market capitalization is about $415 million, based on Monday's closing price.
S&P said Six Flags, facing a lack of major new rides and a "weak" operating environment, will be forced to discount tickets and spend on marketing to generate more attendance.
Snyder is not known as a shareholder activist.
The Wall Street Journal, citing unnamed people close to him, on Tuesday said Snyder believes he can help turn Six Flags around by revamping its marketing. They said this could involve putting logos, videos and product displays in parks, and issuing Six Flags coupons elsewhere.
