Cedar Fair calls for vote on Q Funding board nomination issue, recommends voting against
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[Ed. note: The following is an excerpt of a press release. -J]
Cedar Fair Entertainment Company (NYSE: FUN), a leader in regional amusement parks, water parks and active entertainment, today announced that it has filed a preliminary proxy statement with the Securities and Exchange Commission regarding a Special Meeting of Unitholders requested by Q Funding III, L.P. and Q4 Funding, L.P. (Q Investments), which together beneficially own 5,687,276 units, or approximately 10.28% of the outstanding units of Cedar Fair.
Q Investments has requested a Special Meeting of unitholders to vote on an amendment of the limited partnership agreement to give unitholders the right to nominate directors for election to the Board of Directors. However, Q Investments’ proposal is inconsistent with the applicable governance documents of Cedar Fair and Cedar Fair Management, Inc., its General Partner, which requires that the regulations of the General Partner be amended in order to give unitholders the right to nominate directors for election to the Board of Directors. In particular, Q Investments’ proposal is solely an amendment of the Company’s partnership agreement and does not include the required amendment to the regulations of the General Partner. Therefore, Q Investments’ proposal would be ineffective to accomplish the goal of giving unitholders the right to nominate directors for election to the Board of Directors.
In addition, Q Investments’ proposal does not require that any unitholder intending to nominate potential directors for election to the Board of Directors provide any advance notice of, or any information with respect to, such nominee. The fact that Q Investments’ proposal lacks any basic procedural or informational requirements means that nominations could be made in a disorganized manner that is not in the best interests of unitholders. As a result, the Board of Directors recommends a vote “AGAINST” Q Investments’ proposal.
However, the Board of Directors understands unitholders may desire to have the right to nominate potential directors for election to the Board of Directors. Therefore, and as an alternative to Q Investments’ proposal, the Company is putting two proposals on the agenda for this upcoming Special Meeting that, if approved, would give the unitholders the right to nominate directors for election to the Board of Directors in a manner that is consistent with the applicable governance structure of Cedar Fair and its General Partner. Specifically, the two proposals by the Company are (i) an amendment to the regulations of the General Partner to permit the limited partnership agreement to include a provision giving unitholders the right to nominate potential directors for election to the Board of Directors and (ii) an amendment to the limited partnership agreement to establish certain procedures and information requirements pursuant to which unitholders can nominate potential directors for election to the Board of Directors.
The Company has offered these proposals in order to provide unitholders with an opportunity to vote on proposals that are compliant with the governance structure of Cedar Fair and its General Partner and that, if approved, would effectively establish the right of unitholders to nominate directors for election to the Board of Directors in an orderly, organized and uniform manner.
Read the entire press release from Cedar Fair.
This is a pretty obvious attempt by Cedar Fair to make it look like they are trying to appease shareholders. But, the devil is in the details.
What will be the "certain procedures and information requirements" that the Board will establish? If the procedure is that a unitholder must nominate an individual who's last name begins with "K" and ends in "L" then they have kind of manipulated that process now, haven't they?
But, I'll say this, it appears that the tone of this response is a departure from the way they have been handling Q up to this point. I'm wondering if that is a result from the b-slap they got on the vote? Or, maybe in light of the Falfas debacle they are finally starting to eat some humble pie. (Not characteristic of Kinzel...but maybe, just maybe, the Board is starting to consider life after Kinzel.)
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