NEW YORK, Nov 1 (Reuters) – U.S. amusement park operator Cedar Fair LP (FUN.N) is exploring a potential merger with peer Six Flags Entertainment Corp (SIX.N), people familiar with the matter said on Wednesday.
A tie-up between the two companies would come as concerns about a U.S. economic slowdown and consumers curbing their discretionary spending have weighed on their stock performance. Merging would allow them to weather a slowdown from a stronger position.
The companies have discussed a combination in the past, including in 2019, and there is no certainty that the latest deliberations will result in an agreement, the sources said, requesting anonymity because the matter is confidential.
If there is an agreement, it could come as early as Thursday, when Cedar Fair reports quarterly earnings.
Cedar Fair and Six Flags, which have a market value of $1.8 billion and $1.7 billion, respectively, did not immediately respond to requests for comment.
Shares of Cedar Fair and Six Flags rose more than 6% and 7% on the news, respectively, in afternoon trading in New York. They have both underperformed the Refinitiv United States Leisure & Recreation Price Return Index by more than 15% this year. They have struggled to find their footing after the COVID-19 pandemic took a toll on their revenues.
Cedar Fair owns 11 amusement parks and four gated outdoor water parks in 10 U.S. states and in Toronto, Ontario. Six Flags is the largest operator of water parks in North America, with 27 parks across the United States, Mexico and Canada.
Reporting by Greg Roumeliotis and David French in New York; editing by Jonathan Oatis
Our Standards: The Thomson Reuters Trust Principles.