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Kennywood owners divided on foreign sale

Pittsburgh Tribune-Review

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March 11, 2008

The sale of Kennywood Park is proving not to be as smooth a ride as management had bargained for.

The deal to sell the storied amusement park and four sister venues to Parques Reunidos of Spain awaits approval from the Kennywood founders' dozens of heirs. But many, including an owner who sits on the board of directors, are not ready to punch that ticket.

"I am very much opposed to the sale. It's just kind of getting rammed down people's throats," said Kay Matthews, a Kennywood shareholder whose grandfather, Andrew McSwigan, co-founded the park more than 100 years ago.

Kennywood Entertainment, the parent company under sales agreement, is owned by the 76 descendants of the amusement park's two founding families: the Henningers and McSwigans.

Terms of the deal require a "super-majority" -- not just 50-plus percent -- of both family members' votes in favor, said company executives. The Madrid-based buyer is still scrutinizing Kennywood's books and properties.

"It's taking a little more time to answer all their requests for documents," said Peter McAneny, CEO of Kennywood Entertainment. He said the tentative agreement is in its third draft.

Management announced an agreement Dec. 11 to sell Kennywood. The deal includes the park in West Mifflin, Sandcastle Waterpark in West Homestead, and Idlewild & Soak Zone in Ligonier, as well as theme parks in Bristol, Conn., and Glen, N.H.

McAneny, who is not a shareholder, and a Parques Reunidos spokesman said they expect the sale to be finalized within four weeks.

"As leader of the family, my goal is always 100 percent," Kennywood Chairman and former CEO Harry Henninger said. But with 76 different shareholder owners, "getting 100 percent of a vote on anything is like herding cats."

The initial offer was about $200 million, all in cash, said some family members. Henninger declined to confirm the amount.

"Some want to sell, and some don't want to sell," said Andrew McSwigan, a fourth-generation owner and, since 1971, one of four directors on Kennywood's board. "I'm on the side that doesn't want to sell."

"Kennywood is a hometown treasure," said McSwigan, 69. "I spent my childhood out there and remember riding some rides while they were still under construction."

Kennywood Park is set to open eight weeks from today, on May 3. The founders formed the original Pittsburg Kennywood Park Co. in 1906.

Parques Reunidos owns 61 amusement, animal and water parks, mostly in the United States, and has annual revenue of more than $570 million.

At publicly held corporations, a "super-majority" commonly means 66 percent or 75 percent.

"Some have more shares than others, but nobody has the bulk of the ownership," said Jean McCague, whose father was Kennywood's president for nearly 40 years, until 1963.

"I'd rather it continue in the family," McCague said. "Kennywood has been in our family for so many years that I'm against (the sale)."

Kennywood executives would not spell out its super-majority threshold. Henninger estimated about 90 percent of shareholders at a meeting Downtown around Thanksgiving favored discussing a deal with Parques Reunidos.

But that meeting and the Dec. 11 sales announcement confused some owners. Some thought they were voting whether to look at offers, not to accept one.

"We had not signed a sales agreement," McSwigan said. "Parques Reunidos sent in an offer and wanted to look at the books, and that's all the shareholders authorized."

Henninger said the late-November meeting left "a lot of confusion on all levels -- the management, the board, the shareholders and the press."

None of the family members contacted would disclose their ownership stake. But the owners are spread around. Of the 76 owner-heirs, more than 50 percent live outside the Pittsburgh area, Henninger said.

Henninger said that with increasingly scattered owners, some younger members start to see Kennywood as more of a passive investment than a personal legacy. "A child might be interested in dentistry, but wouldn't otherwise have the money to pursue it" without proceeds from a sale, he said.

"Kennywood is Pittsburgh, and Pittsburgh is Kennywood," said Matthews, who lives in Deerfield Beach, Fla. "It'd be like selling the Carnegie Museum to some conglomerate from Europe."

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