Published: Sun, June 30, 2019
Markets | By Otis Pena

Lego strikes deal to buy back Legoland, other theme parks

Lego strikes deal to buy back Legoland, other theme parks

Legoland Windsor could finally get the upgrade and refurb it so desperately needs, as the private equity fund operated on behalf of the Lego founders' family has agreed to buy the Merlin Entertainments group - which includes the share of Legoland not now under the control of the Lego dynasty.

Merlin, which owns The York Dungeon and Scarborough Sea Life Sanctuary, has accepted the bid from Kirkbi, the investment vehicle of Lego's Danish founding family, Blackstone and pension fund Canadian Pension Plan Investment Board.

Kirkbi, which is backed by the billionaire Kiristiansen family, now owns an almost-30 per cent stake in the entertainment and theme park business.

Merlin has three Madame Tussauds in China and said in January it was in advanced talks with third parties about a number of sites for Legoland Parks in the country.

As Merlin Entertainments will now merge into Blackstone, the former will no longer be available on the stock market.

Merlin floated on the London Stock Exchange six years ago, at an initial price of 315p per share.

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Merlin is the world's second largest attractions company after Disney. Some of the brands they operate include Alton Towers, the London Eye and Thorpe Park.

According to Kirkbi chief executive Soren Thorup Sorensen, the deal has been unanimously recommended to the shareholders.

The buyout was a huge relief to Merlin's investors who have endured extreme stock volatility in recent years as a result of terrorist attacks on major tourist attractions rattling business at Merlin's various subsidiaries. "Private ownership is simply better placed than current public shareholders to underwrite the investments Merlin must make..."

"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". Blackstone previously owned Merlin before a 2013 IPO.

"As the Company deploys an increasing amount of capital that takes time to generate earnings, we fear it will take several years for Merlin to be appropriately valued by public shareholders", ValueAct wrote Merlin's board in a letter released to the public.

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