Festival Fun, Palace Finance extend tender offer for 10 7/8% notes

By Angela McDaniels

Tacoma, Wash., Jan. 31 - Festival Fun Parks, LLC and Palace Finance, Inc. extended the tender offer for their 10 7/8% senior notes due 2014 to 12:01 a.m. ET on Feb. 15 from Jan. 31.

Holders had tendered and delivered consents for 99.96% of the notes as of Jan. 29, according to a news release.

The consents will allow the companies to amend the note indenture to eliminate substantially all of the restrictive covenants and certain events of default contained in the indenture. A supplemental indenture has been executed, and the amendments will become operative once the tendered notes are accepted for purchase.

The tender offer began on Dec. 20.

The companies said they will pay 103% of par plus accrued interest. Those who tendered by the consent deadline, 5 p.m. ET on Jan. 7, will also receive a consent fee of 5%.

The tender offer is conditioned on obtaining sufficient financing. The companies said they have arranged financing, and one of the conditions to that financing is that the landlords under certain leases must provide waivers to the new lenders. Not all of those waivers have been obtained, according to the release, but the companies expect to secure the waivers and satisfy the financing condition within the next few weeks.

Merrill Lynch & Co. (888 654-8637 or 212 449-4914) is the dealer manager and solicitation agent. Global Bondholder Services Corp. (866 952-2200) is the information agent.

On Nov. 8, Palace Entertainment Holdings Inc. said it received tenders for $8.82 million of the 10 7/8% notes under a change-of-control offer that expired on Oct. 31, and Festival Fun Parks purchased them on Nov. 5 for $8.96 million.

As already reported, the change-of-control offer was required under the notes' indenture following Centaur Holdings United States, Inc.'s acquisition of Palace Entertainment from Palace Holdings Group, LLC.

Centaur is an affiliate of Parques Reunidos SA, which is primarily owned by Candover Partners Ltd.

Based in Newport Beach, Calif., Palace Entertainment owns and manages a portfolio of 32 family-oriented parks in eight states.

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