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April 6, 2010 4:20 PM

Roller Coaster Ride Ends: Cedar Fair LBO Called Off

Posted by Zach Lowe

It was a rare positive sign amid the worst economic year in a long time: An honest-to-goodness leveraged buyout in which Apollo Management agreed to purchase struggling amusement park operator Cedar Fair for $2.4 billion in cash and assumed debt. 

Alas: It's not happening. The deal fell apart Tuesday after it became clear that too few Cedar Fair shareholders would approve it, with one major shareholder holding out because of concerns that Apollo was buying the company at an artificially low price, according to Reuters and The New York Times

The collapse of the deal surely comes as a blow to the four firms that advised on it: Wachtell, Lipton, Rosen & Katz and O'Melveny & Myers for Apollo, and Weil, Gotshal & Manges and Squire, Sanders & Dempsey for Ohio-based Cedar Fair. Lead partners at those four firms did not immediately return calls seeking comment, so it's unclear exactly how much in fees they stand to lose now that the deal has been called off. 

One bright spot for Apollo: Its outside counsel at Wachtell and O'Melveny secured a clause in the original agreement that called for Cedar Fair to pay Apollo $6.5 million in fees in the event Cedar Fair failed to win the approval of two-thirds of its shareholders, according to Reuters. 

Partners Michael Aiello, Howard Chatzinoff, and Matthew Gilroy led the Weil team. Partners Ante Vucic and Steven Cohen led the Wachtell team on the deal. Cipriano Beredo III led the Squire Sanders team, and corporate partner Gregory Ezring headed up the O'Melveny team, according to our prior reporting.

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