Six Flags' pact with Cedar Fair; Disney's Hulu buy: 4 big deal reports

Investing.com -- Here is your Pro Recap of 4 head-turning deal dispatches you may have missed last week: Disney to buy the remaining stake in Hulu from Comcast's NBCUniversal, and deals at Six Flags Entertainment/Cedar Fair, Realty Income/Spirit Realty Capital, and United Therapeutics/Miromatrix Medical.

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Six Flags Entertainment and Cedar Fair to merge

On Thursday, in line with recent speculation, the amusement park companies Cedar Fair (NYSE:FUN) and Six Flags Entertainment (NYSE:SIX) disclosed their agreement to merge in an all-stock transaction. Upon completion of the merger, Cedar Fair's unitholders will hold a majority stake of 51.2%, while Six Flags' shareholders will possess around 48.8% in the newly formed entity, which is projected to have a pro forma enterprise value close to $8 billion.

However, a significant shareholder of Six Flags, Land & Buildings Investment Management, criticized the merger, arguing that it falls short of maximizing shareholder value. The hedge fund believes there are better alternatives available and the right path forward for Six Flags is to capitalize on its real estate assets, which they estimate could be valued near $30 per share, based on interest from potential buyers.

Nonetheless, the Wall Street analysts’ sentiment appears optimistic. Citi raised its rating for Six Flags Entertainment from Neutral to Buy, setting a price target of $24.00, down from the previous $26.00. Similarly, B.Riley lifted its rating from Neutral to Buy, with an increased price target of $30.00, up from $24.00.

Six Flags Entertainment shares surged more than 27% last week, while Cedar Fair closed the week with around 11% gain.

Disney to buy remaining 33% stake in Hulu from Comcast's NBCUniversal

Walt Disney (NYSE:DIS) announced its acquisition of Comcast's (NASDAQ:CMCSA) one-third interest in the streaming platform Hulu, in a move that was largely expected.

The transaction involves Disney compensating Comcast's NBCUniversal around $8.61B by December 1, which represents the guaranteed minimum value agreed upon in 2019. Moreover, Disney might issue additional payments contingent on Hulu's equity value as of Sept 30, with the appraisal process expected to conclude next year.

Realty Income to buy Spirit Realty Capital in a $9.3B deal

Last Monday, Realty Income (NYSE:O) announced its plans to acquire Spirit Realty Capital (NYSE:SRC) in an all-stock transaction valued at $9.3B, aiming to broaden its real estate portfolio, as reported by Reuters.

The commercial real estate sector, particularly office spaces, has been impacted by rising interest rates and a trend towards remote working. Realty Income anticipates that the merger will lead to reduced rent concentration for its clients while boosting the combined entity's annualized contractual rent from $3.8B to $4.5B.

According to the deal's terms, Spirit shareholders are set to receive $37.34 per share, placing the real estate investment trust's valuation at approximately $5.28B, based on Reuters' calculations. When the transaction concludes, which is projected to occur in the first quarter of 2024, the shareholders of Realty Income and Spirit will own roughly 87% and 13%, respectively, of the combined company.

United Therapeutics acquires Miromatrix Medical

Miromatrix Medical (NASDAQ:MIRO) shares jumped more than 216% last Monday after the announcement that it will be acquired by United Therapeutics (NASDAQ:UTHR).

United Therapeutics will commence a tender offer to acquire all outstanding shares of Miromatrix for a purchase price of $3.25 per share in cash at closing (an aggregate of approximately $91 million) and an additional $1.75 per share in cash upon the achievement of a certain clinical development milestone.

This transaction is not subject to any financing condition and is expected to close in the fourth quarter of 2023, subject to customary closing conditions, including the tender of a majority of the outstanding shares of Miromatrix’s common stock.

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