Snyder Rethinks Stance On Six Flags Investment
Tuesday, April 26, 2005
Suddenly, owning a chunk of a money-losing amusement park company may not be such a terrible idea after all to Daniel M. Snyder.
Three months after announcing plans to sell his 8.8 percent stake in Six Flags Inc., the Washington Redskins' owner says he is "reconsidering and evaluating all . . . options." Those include following through on the sale, buying more stock or even trying to take over the Oklahoma City-based operator of 29 U.S. parks, including one in Largo.
Why the apparent change of heart?
Snyder, through his spokesman, declined to comment yesterday.
"Nope, everything we've got to say" is in the document Snyder filed with the SEC last Thursday, Karl Swanson said.
In the SEC filing, Snyder said he may "seek representation on the Company's board of directors, or encourage the Company and third parties to consider a merger, sale assets, consolidation, business combination, recapitalization or refinancing involving the Company, including a possible acquisition of the Company or its assets."
Snyder noted that he may change his mind again, pledging to "take any and all actions" to maximize the value of his investment.
Six Flags spokeswoman Debbie Nauser did not return a telephone call seeking comment.
Snyder's possible turnabout comes as Six Flags' stock price has been dropping: It closed at $4.17 yesterday on the New York Stock Exchange, down 19 percent from Jan. 14, the day Snyder announced he would be selling his stake.
Little is known about Snyder's business life outside of the Redskins and FedEx Field, which he also owns. He is the founder and former chairman of Snyder Communications Inc., a publicly traded advertising and marketing firm that he sold in 2000 to Havas, a French company, for about $2 billion in stock.
In January, Snyder seemed eager to dump the 8.15 million Six Flags shares he owns through his entity called Red Zone LLC, which is based at Redskin Park in Ashburn.
"In light of what we believe will be a disappointing future for the Company we have determined that continued investment in the Company is not in our best interest," Snyder wrote in January to a Six Flags board member in a letter filed with the SEC.
Snyder bought the stock for about $34.2 million last August, but quickly decided -- or so it seemed -- that Six Flags was going nowhere. The company posted a $464.8 million loss in 2004, its sixth straight losing year.
Snyder seemed to be looking for a bargain last August when, over a two-week span, he bought Six Flags stock at prices ranging from $3.54 to $4.74 a share. The stock had traded above $18 as recently as May 2002.
In September, Snyder met with Six Flags' non-management directors, offering suggestions, which were not accepted, on how to run the company, Six Flags Chairman Kieran E. Burke later told Wall Street analysts.
Snyder said he also plans to "contact and consult with other stockholders" about Six Flags' prospects.
One major shareholder is Microsoft Corp. founder Bill Gates, who at the end of last year had accumulated 10.8 million shares through Cascade Investment LLC, according to an SEC filing. Cascade's manager, Michael Larson, did not respond to a request for comment yesterday.