Activist investor Jana Partners is teaming up with NFL player Travis Kelce and some big-name executives to buy a 9% stake in Six Flags Entertainment Corp., leading to a nearly 18% rise Tuesday in the stock of the theme park company and owner of real estate around the country.
Six Flags has been dealing with mounting debt as the amusement park business faces headwinds and consumers look to spend less money. Six Flags merged with fellow regional amusement park operator Cedar Fair last year and moved the combined entity's headquarters to Charlotte, North Carolina. At the time the deal closed, the combined company had a portfolio of 42 theme parks across North America.
New York City-based Jana Partners has a history of investing in undervalued companies. Activist investors often recruit celebrities like Kelce to bring awareness to their campaigns, with the celebrities usually getting a part of the profits if a targeted company's shares rise.
"I am a lifelong Six Flags fan and grew up going to these parks with my family and friends," said Kelce, who plays for the Kansas City Chiefs, in a statement Tuesday from Jana Partners. "The chance to help make Six Flags special for the next generation is one I couldn't pass up."
Six Flags has been using its real estate to raise funds, including the sale of land at California’s Great America to industrial real estate owner Prologis for $310 million. Another theme park in Maryland’s Prince George's County is set to close permanently on Nov. 2 and is being actively marketed for sale. The park could make way for a 500-acre redevelopment project, as CoStar News reported.
Another activist investor, Land & Buildings Investment Management LLC, issued an open letter to shareholders of Six Flags last month that outlined how it thinks the theme park company should "monetize its real estate" to "unlock substantial value."
Jana Partners, founded by Barry Rosenstein, previously brought in retired basketball star Dwayne Wade, as well as former baseball player CC Sabathia, as advisers on its campaign at pet-food maker Freshpet.
Jana Partners Managing Partner Scott Ostfeld said the investor group looks forward to working with Six Flags' board and management to "unlock shareholder value."
A Six Flags spokesperson told CoStar News in an email on Tuesday that "we appreciate the perspectives of shareholders and take their feedback seriously as we continue to advance our initiatives to increase attendance, enhance our guest experience and drive profitable growth and shareholder value.”
Dennis Speigel, CEO of consulting firm International Theme Park Services in Cincinnati, said Six Flags has been hit by what he calls "the perfect storm," comprising rainy weather, inflation and economic uncertainty.
Meanwhile, the investment group with Jana Partners and Kelce also includes consumer executive Glenn Murphy and technology executive Dave Habiger. The investment group's 9% stake makes it one of Six Flags' largest shareholders, the statement said.
Kelce has won three Super Bowls with the Chiefs and is engaged to pop superstar Taylor Swift. Murphy formerly served on the boards at retailers such as Gap and Lululemon. Habiger currently serves as vice chairman of J.D. Power and has led several public technology businesses through significant growth and strategic transactions, according to the statement.