Now, here's a big surprise (Yes, that was sarcasm...)

As expected, this is the "re-thinking of the capital situation" mentioned during the post-announcement conference calls.

You know the thoughts of carrying that $2B debt load had to have been driving Kinzel crazy

http://biz.yahoo.com/prnews/060614/clw019.html?.v=52

Can someone explain this in english. It sounds like they may be taking on more than they really should and hoping that the leisure market remains strong for the next several years. That may be a BIG gamble with the economy moving towards a recession because of the housing market coming undone.

In a nutshell, it means that Cedar Fair is going to issue additional shares (or, "units" in the case of a partnership like CF) of the company for sale to raise cash to pay down their debt. Basically, they are increasing the amount of stock available for sale in the company. (This is known as a secondary or subsequent offering, as opposed to the initial public offering--IPO-- that a company conducts when they first go public.)

The concern for current unit holders is that our shares of the company will be "dilluted", which means we'll own a smaller percentage of the company after the new shares are sold than we currently do (because the pie will be cut up in smaller pieces...but the size of the pie doesn't really change). This in turn could reduce the annual distribution (the share of the profits paid back to the shareholders), since each current unit holder will own a smaller portion of the company, and thus be entitled to a smaller share of the profits.

However, the hope is that the revenue increases that will result from bringing the Paramount Parks in will offset the dillution, and thus the annual distribution paid out to each unit holder will stay the same (or maybe...even increase).

From the company's financial perspective this is a good idea, and pretty much what everyone expected them to do. (They had a similar--but smaller--offering to pay for the purchase of GL.) The end result is that it makes the acquisition of Paramount Parks more "economical." Cedar Fair's debt had never been publically rated before, but on the conference call they said they expected their interest to be in the 7% range. So, retiring 12.5% of the debt almost immediately is a good thing to do.

I have a question. Will current shares in the company decrease in price right now? And will the new shares be cheap to purchase?

I have a question.  Will current shares in the company decrease in price right now?  And will the new shares be cheap to purchase?

It most likely won't move the price of existing shares too much. As part of the offering an offer price will be set. It will likely be in line with the current stock price (in the neighborhood of $25 a share or so).