Newspaper article THE JOURNAL RECORD

Six Flags Stockholders Take Sides as Fight for Management Builds to a Resolution

Newspaper article THE JOURNAL RECORD

Six Flags Stockholders Take Sides as Fight for Management Builds to a Resolution

Article excerpt

Some major Six Flags stockholders have been announcing which side of the battle they support as the fight for management builds to a resolution, and analysts say a likely winner is becoming apparent.

The most recent declaration of allegiance came from New York investor Simon Glick, who owns about 9.8 percent of the Oklahoma City-based company. Securities and Exchange Commission filings late last week show he intends to vote in support of Daniel Snyder's proposal to take over Six Flags' management. Snyder is trying to boost his own 11.7 percent stake in the company to 34.9 percent and win the support of other shareholders.

Days earlier, Diaco Investments LP, with a 9.1 percent stake, filed a similar SEC report, saying now is the wrong time to sell the company. Snyder's Red Zone LLC stands a better chance of increasing Six Flags' value under his leadership than an outsider buying the company or parts of it, Diaco's filing said.

If it's something I had to put money on, even though I'm not a wagering man, I think eventually the company is going to be under Snyder's control - maybe not completely, but he's going to be a major player in just a few months, Motley Fool contributor and investment analyst Rick Munarriz said.

In August, Snyder announced his intent to secure a 34.9 percent stake in the company, which would effectively give him control and allow him to push through management changes. His company, Red Zone LLC, is the largest stockholder of Six Flags.

Snyder has repeatedly said he wants to get rid of three of the company's executives: Chairman and Chief Executive Kieran Burke and directors James Dannhauser and Stanley Shuman.

Shortly after his declaration to buy more shares, company management announced a counter-ploy: the wholesale auction of the company, or at least consideration of selling off individual parks such as AstroWorld in Houston. Snyder is trying to stop the sale.

Burke wrote in a letter to shareholders at the beginning of November that Snyder's plan should be turned aside: Snyder wants you to place him and his hand-picked designees on the Six Flags board so they can change the senior management and strategic direction of your company. In our view, that's a risky bet.- Red Zone victory would seriously undermine our efforts to sell the company and jeopardize your chances to receive maximum value for all of your Six Flags shares.

The fight is good for stockholders, at least in the short term, Munarriz said, because the renewed attention to the company is driving stock prices up. Six Flags' stock fell 10 cents Monday to close at $7.39 Monday. In 1999, the stock sold as high as $40, but dropped as low as $3.35 earlier this year.

If you were holding individual shares for $3 or $4 back in May, and they've just about doubled since then, you're not going to complain about Six Flags' management, Munarriz said. …

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