(Reuters) - Six Flags Entertainment Corp SIX.N has approached Cedar Fair LP FUN.N with a merger offer, pursuing a combination that would unite two of the largest U.S. amusement park operators, people familiar with the matter said on Wednesday.
The move shows how Six Flags, already the world’s largest regional theme park operator, wants to expand its footprint so it can increase ticketing pricing power, even as Chief Executive James Reid-Anderson is preparing to retire by the end of February.
Cedar Fair is considering Six Flags’ cash-and-stock offer, and there is no certainty a deal will be reached, the sources said. Details of the offer could not be learned.
The sources asked not to be identified because the matter is confidential. Six Flags declined to comment, while Cedar Fair did not immediately respond to a request for comment.
Cedar Fair shares jumped as much 11.4% on the news before paring gains, giving the company a market capitalization of around $3.36 billion. Six Flags shares fell as much as 5.3% before trimming losses, giving the company a market capitalization of roughly $4.3 billion.
Based in Grand Prairie, Texas, Six Flags has 26 parks across the United States, Mexico and Canada. Headquartered in Sandusky, Ohio, Cedar Fair owns and operates 11 amusement parks, four outdoor water parks and an indoor water park in several U.S. states and in Toronto, Ontario.
Dealmaking in the leisure and entertainment sector has been heating up. Earlier on Wednesday, private equity firm Blackstone Group Inc BX.N said it had agreed to acquire a 65% stake in U.S. resort operator Great Wolf Resorts Inc in a $2.9 billion deal. Great Wolf's owner, Centerbridge Partners LP, will remain an investor in the company.
Reporting by Greg Roumeliotis in New York; Editing by Bernadette Baum and Matthew Lewis
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