Six Flags Entertainment Corp. shares rose 1.1% in pre-market trading on Wednesday to $12.44 after activist investor Jana Partners called on the company’s board to consider a potential sale of the business.
Jana disclosed its position and demands on Tuesday evening, prompting a rise in Six Flags shares during after-hours trading.
The hedge fund holds an economic interest of approximately 9% in Six Flags, valued at around $200 million.
Jana Partners Calls for Strategic Review
In a letter to the Six Flags board, Jana called for the company to hire an investment bank and begin an immediate strategic review that would include consideration of a sale.
The fund cited Six Flags’ second-quarter financial performance as part of its rationale for seeking a review.
According to the source, second-quarter revenue came in below analyst expectations, while the company reported a per-share loss compared with a consensus forecast for a profit.
Jana described the second-quarter results as “deeply disappointing” and argued that the performance supported its case for considering a sale of the company.
Shares Remain Near 52-Week Low
Six Flags shares entered Wednesday’s session after having declined by more than half from their 52-week high of $27.37.
The stock had also been trading close to its 52-week low of $12.00 before Jana publicly disclosed its demands.
Broader U.S. equity futures recorded relatively small moves on Wednesday, with both the S&P 500 and Dow Jones futures up around 0.2%.
Jana’s proposal introduces a potential strategic review for Six Flags, although the company has not announced a sale process or transaction based on the information provided.