Cedar Fair LP, the owner of seven amusement resorts such as Knott's Berry Farm, agreed to buy the Paramount Parks unit of CBS Corp. for $1.24 billion to add five operations in the United States and Canada.
Bear, Stearns & Co. will provide $2 billion in financing for the deal, Cedar Fair, a publicly traded partnership based in Sandusky, Ohio, said in a statement yesterday. The parks will remain open while the sale is pending.
Combined, the operations will generate almost $1 billion in annual revenue from about 25 million customers, Cedar Fair said. CBS, which inherited the theme-parks after splitting from parent Viacom Inc. in December, said in January it would sell the resorts because they don't fit with its broadcasting focus.
CBS should receive about $1 billion in after-tax proceeds from the sale, said Lehman Bros. analyst Anthony DiClemente and J.P. Morgan analyst John Blackledge in research notes yesterday. That's higher than the $800 million to $900 million earlier estimated by DiClemente, who rates the shares ``overweight," according to his note.
The media company, the owner of the CBS television network, is likely to use the proceeds to buy back shares, both analysts wrote.
CBS may also use the proceeds of as much as $1.1 billion to finance the company's pension plan, Cathay Financial Inc. analyst Andrew Baker said in a note to investors.
Paramount Parks, which includes King's Island near Cincinnati, last year had 12.2 million customers and sales of $423 million . Cedar Fair had $569 million in sales from 12.7 million visitors.