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Apollo’s Deal for Cedar Fair Collapses

NEW YORK (Reuters) – Apollo Management’s $635 million takeover of theme park operator Cedar Fair (FUN.N) has collapsed due to lack of investor support, costing the company $6.5 million in fees, Cedar Fair said on Tuesday.

The $11.50-a-share offer, made in December, was notable for being one of the few leveraged buyouts of last year but ran into problems as shareholders vented about the price.

The deal, valued at $2.4 billion when including refinancing the company’s outstanding debt, needed a two-thirds majority of shareholder support to pass. But shareholders including 18 percent holder Q Funding had said they would not support the bid and urged others not to.

“The proposed buyout price represents what we believe to be a “bargain basement” price struck during one of the worst economic climates this country has ever seen,” Q Funding said in a letter to other stockholders in February.

Ohio-based Cedar Fair, which owns 11 amusement parks, said the two parties had mutually agreed to terminate the deal. Cedar Fair will pay Apollo $6.5 million to reimburse Apollo [APOLO.UL] for expenses incurred in connection with the deal, it said.

“The Board has heard from Cedar Fair unitholders and it is apparent that the merger transaction does not have the required level of investor support,” said Dick Kinzel, Cedar Fair’s chairman, president and chief executive.

Cedar Fair said it will be evaluating next steps to address its capital structure and has adopted a unitholder rights plan, which would become exercisable after a person or group owns 20 percent or more of the company’s units.

Otherwise know as a ‘poison pill,” such plans are a takeover defense that makes it costly and difficult to acquire a company if any party acquires a certain percentage of a corporation.

The rights will expire on April 5, 2013, Cedar Fair said.

Cedar Fair’s shares were up 1.6 percent to $12.40 in early afternoon trading on the New York Stock Exchange. (Reporting by Megan Davies; Editing by Tim Dobbyn)