Former owners return with £4.8bn bid for leisure giant
The former owners of leisure giant Merlin Entertainments have agreed a £4.8bn deal to take the business private again.
Kirkbi, the investment vehicle of the Danish billionaire family which controls Lego, and private equity group Blackstone owned the group for eight years before its £3.2bn stock market float in 2013.
Kirkbi already owns nearly 30% of Merlin, with its involvement dating back to the sale of its Legoland parks in 2005. Blackstone and Canadian pension fund CPPIB are backing its bid for the rest of the group.
Legoland Discovery Centre at Arena Birmingham
Merlin is the world’s second-biggest visitor attractions group behind Walt Disney. It owns Sealife Centre, Legoland and Madame Tussauds attractions around the world alongside other tourist destinations including Alton Towers and Warwick Castle.
Merlin last year welcomed a record 67m visitors to its sites around the world. Its global attractions are mainly in Europe, United States, Australia and the Far East and it generated about 70% of its revenues outside the UK.
The consortium now belives that private ownership “will better enable the management team to focus on and execute their strategic vision for the business”.
The joint venture would see Kirkbi own 50% of the group with Blackstone and CPPIB splitting the remaining half.
It said that its “unique group of investors is equipped with the appropriate long-term investment horizon, expertise and capital required to realise the company’s potential”.
The cash offer of 455p per share is at a 15% premium on last night’s closing share price of 395p.
The deal must be approved by Merlin’s shareholders. The bidders have irrevocable undertakings from shareholders which own 10% of the group.
A baby Gentoo penguin was born at the National Sea Life Centre Birmingham in May
Private equity group Blackstone last year bought the NEC Group in an £800m deal. NEC Group and Merlin work closely together, with the Birmingham Legoland Discovery Centre and Sealife Centre within and next to NEC Group’s Arena Birmingham, while Merlin’s Bear Grylls attraction is at the NEC campus in Solihull.
Merlin has had a mixed trading performance over the last couple of years, which has been reflected in its share price and its relegation from the FTSE 100.
Two years ago Merlin’s shares spent a month trading above 500p – which gave the group a market value of £5.5bn – but had fallen to nearly 300p by the end of 2018.
However its 2018 financial performance did show improvements, with earnings close to £500m on annual revenues of £1.7bn, and it was “positive” about the outlook for the year ahead.
