|The board of Six Flags put the company up for sale and said it would fight an offer for 35 pecent of the company from Washington Redskins owner Daniel Snyder.|
NEW YORK (CNN/Money) -
Amusement park operator Six Flags Inc. announced Thursday it would seek proposals for a possible sale of the company, but would oppose efforts by Washington Redskins owner and dissident investor Daniel Snyder to take control outside this process.
Shares of Six Flags (Research) shot up 11.2 percent following the announcement.
The company said that Red Zone LLC, the investment firm controlled by Washington Redskins owner Daniel Snyder, will be invited to participate in an auction should he have a "serious interest in pursuing an acquisition of the entire company."
But the board said it would oppose his proposal to increase his stake in Six Flags from its previously stated 11.7 percent to a proposed 35 percent stake.
"The Board believes that initiating a sale process at this time is the best way to deliver full and fair value to all Six Flags stockholders, particularly in light of the recent strong, broad-based performance of Six Flags' parks and the proposed actions by Red Zone, which is seeking to acquire effective control of the company without providing value to all stockholders," said a statement from Michael Gellert, presiding independent director of Six Flag's board.
Snyder, who was already the company's largest shareholder, announced earlier this month that he was offering $6.50 a share for the additional stake in Six Flags, which was then a premium of about 18 percent to market prices. He also was seeking to remove the chief executive officer, chief financial officer and one outside director from the board, to be replaced by himself and two allies.
Snyder could not immediately be reached for comment Thursday.
Matthew Harrigan, an analyst with Janco Partners Inc., said potential buyers would be few and far between. He ruled out larger rival Walt Disney Co. (Research)
"Disney has a very different business. Disney is a destination parks business, and Six Flags is a regional chain, catering to locals," he said.
Six Flags runs 30 amusement parks, but its properties do not have hotels. The chain's revenue and profit have lagged behind in recent years -- it posted a profit in the most recent quarter, but has reported annual losses since 1999.
Bill Gates, founder and chairman of Microsoft Corp., said last year that he had owned Six Flags shares for years and was dissatisfied with the company's performance.
For a look at more details on Snyder's offer for a larger stake in Six Flags, click here.
--from staff and wire reports