Six Flags Entertainment Corporation New (SIX) has disclosed a new risk, in the Corporate Activity and Growth category.
The Merger Agreement between Six Flags Entertainment Corporation New and Cedar Fair presents a significant strategic constraint by limiting Six Flags’ ability to entertain or facilitate alternative transaction proposals. The stipulations deter potential third-party acquirers due to a binding commitment to Cedar Fair, which includes hefty termination fees of up to $63.2 million under certain conditions. This arrangement could potentially discourage more favorable proposals from emerging, as interested parties may be dissuaded by the inability to engage in negotiations or the financial penalties for pursuing an Alternative Transaction, potentially undermining Six Flags’ shareholders’ value maximization.
The average SIX stock price target is $29.77, implying 14.11% upside potential.
To learn more about Six Flags Entertainment Corporation New’s risk factors, click here.
