Main Photo: The Gardaland Magic Hotel, Italy
Date: June 2019
Names: Merlin Entertainments and Kirkbi
No. of Keys: 4,500
Seller: Merlin Entertainments
Buyer: In the words of the film, everything appears to be “awesome” in the world of Lego as it expands its empire by snapping up Legoland and Madame Tussauds owner Merlin Entertainments
The Danish billionaire family that controls the Lego toy firm, with other investors, is paying £4.8bn for Merlin.
Kirkbi Invest says it has the money and experience to “realise the company’s potential to grow”.
Merlin also owns the London Eye, Alton Towers and Chessington Adventures.
Kirkbi already owns almost a third of the shares in Merlin Entertainments, and says it does not expect the deal to lead to any significant changes.
All existing Merlin attractions in the UK will remain open and it has no plans to sell any part of the business, it said.
Kirkbi chief executive Søren Thorup Sørensen said the group wanted to help the firm reach its “full potential, which we believe is best pursued under private ownership”.
“With a shared understanding of the business and its culture, we believe that this group of investors has the unique collective resources necessary to equip Merlin, for their next phase of growth,” he added.
Private equity firm Blackstone – part of the investment group – said it had the “substantial resources” required to support Merlin’s long-term plans “which will require significant investment to ensure its long-term success”.
Merlin is the second-largest operator of visitor attractions globally with more than 130 attractions in 25 countries. It said it had already rejected several approaches.
The move comes just weeks after activist shareholder ValueAct Capital, which holds a 9.3% stake in Merlin, called on the company to find a private buyer.
The sale means that Merlin’s shares will be delisted from the London Stock Exchange, which it floated on six years ago.
The offer price of 455p a share values Merlin’s share capital at £4.77bn, but the deal also includes £1.2bn of debt giving the group an enterprise value of just under £6bn.
Merlin chairman Sir John Sunderland said its board unanimously recommended the deal to the company’s shareholders.
“The company has generated meaningful value since its IPO (Initial Public Offering), with significant growth in revenue, earnings and cash flow.
“The Merlin independent directors believe this offer represents an opportunity for Merlin shareholders to realise value for their investment in cash at an attractive valuation.”
Merlin has faced some high-profile struggles, including a crash in 2015 at one of its Alton Towers roller-coaster which injured 16 people. Visitor numbers to its attractions were also hit by the terror attacks in London and poor weather which led to a profits warning in 2017.
Hargreaves Lansdown analyst George Salmon said the firm’s recent troubles meant the price agreed for the deal was lower than it would have been two years ago.
“For the new owners, the move is motivated by a desire to remove the company from the daily scrutiny of the public markets, and focus on longer-term investments,” he said.
THPT Comment: Not quite hotels, but close…although there is a hotel at Alton Towers, owned by Nick Leslau’s Prestbury Investments and run by Merlin Entertainments. The Gardaland Magic Hotel in Italy, opened this month brings their total hotel inventory to 4,500 rooms.
First Seen: BBC
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