Merlin Entertainments: General Discussion

[Matt.GC]

I would expect the intention is a long term investment. The Canadian company is a pension scheme which tends to look at long term growth. Also Lego wouldn't want to weaken there brand (they most likely intend to improve it).

I agree. There's no history of asset stripping in any of the new investors. Pension funds tend to invest in longer term, safe, steady growth businesses. I'm not one for optimism, but this will be at least no worse than Merlin continuing to float on the stock exchange.

Everything points to longer term investment being the intention here. I think there is a market for these attractions in the UK and I would imagine this trip are thinking the same. The parks in particular were never going to get the capital and operational investment they desperately need under Merlin as a PLC.

 

[AT86]

An interesting couple of articles if anyone has a spare 20 mins and is inclined to read more on the history of Merlin ownership and what this could tell us about the changes that are afoot:

https://www.brothers-brick.com/2019...ame-together-and-what-it-means-today-feature/

There also seems to be some concern about the level of debt this takeover will leave Merlin with, although the full details aren’t clear yet it is worrying that any benefit going private may bring in terms of higher investment could be reduced by higher debt repayments.

https://www.ft.com/content/69eefe14-9e42-11e9-9c06-a4640c9feebb

 

[Matt N]

I thought the consortium was paying off Merlin's debt as part of the purchase? I'd always heard that it was £4.8bn for the company and £1.2bn in debt.

 

[Craig]

They're not paying off the debt, they're agreeing to take it on, that's where the £6bn figure came from as this was the value of the purchase plus the debt they were assuming too. That £1.2bn will be in addition to any further debt they want to load onto Merlin too. If that total level of debt is very high, then it can cause concern.

 

[Matt N]

They're not paying off the debt, they're agreeing to take it on, that's where the £6bn figure came from as this was the value of the purchase plus the debt they were assuming too. That £1.2bn will be in addition to any further debt they want to load onto Merlin too. If that total level of debt is very high, then it can cause concern.

Ah right. Thanks @Craig!

 

[AT86]

Getting the thread back on topic, there's lots of documents on the Merlin web site: here
(scroll to the bottom and click accept)

Most of the documents are dry and full of legalese, but some of the infographics are quite interesting.

If I am reading this right then Mr Varney is going to do well out of the deal. He currently has 6,737,082 Merlin shares, meaning he will receive £29,979,970 once the sale happens.

 

[Bert2theSpark]

meaning he will receive £29,979,970 once the sale happens.

He might be able to buy his own ghost train with that much money!

 

[Jb85]

Debt only a problem if It cannot be serviced.

Providing investment happens to get gate figures up across the board, then the debt wouldn’t be an issue. There will be a plan in place to tackle this anyway

 

[Chessy Shop]

If I am reading this right then Mr Varney is going to do well out of the deal. He currently has 6,737,082 Merlin shares, meaning he will receive £29,979,970 once the sale happens.

Everything that's wrong with Merlin, and indeed the country, in a microcosm.

Thirty million quid could go a long way towards investing in the parks, improving low pay, reversing some of the cut-backs/job cuts. But no, let's stuff that money in Varney's already fat pockets.

 

[imanautie]

Everything that's wrong with Merlin, and indeed the country, in a microcosm.

Thirty million quid could go a long way towards investing in the parks, improving low pay, reversing some of the cut-backs/job cuts. But no, let's stuff that money in Varney's already fat pockets.

The thing is that money is for what nick owns not Merlin.

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[Jb85]

£4.8m for the group is cheap - we should have a whip round


thinks the title needs fixing

 

[Rick]

Everything that's wrong with Merlin, and indeed the country, in a microcosm.

Thirty million quid could go a long way towards investing in the parks, improving low pay, reversing some of the cut-backs/job cuts. But no, let's stuff that money in Varney's already fat pockets.

This is satire, right?

If you are who you say you are I think you're just bitter because he owns a percentage of you.

 

[ChristmasPud]

Yeah, that's not money that could have been invested in the parks... completely different

Varney presumably had that many shares to have some small degree of control in Merlin when it went public, or at least get his millions if he had to surrender his shares. He now has no degree of ownership over the company again.

What's more questionable is probably the massive bonuses he was getting every year despite leading the company (in my opinion) the wrong way and getting into the situation he's in now.

 

[Thameslink Rail]

I think that it is very obvious that the RTPs have gone down hill since Merlin went public. This year's travellers choice awards on Trip advisor demonstrates this because Alton Towers came 10th while Thorpe Park, Chessington and Legoland didn't make the top 10. Many local parks beat them by having better customer service despite not having the best rides, this is largely because they don't have shareholders to please so they can focus on making their guests happy. As Lego take over, we can only hope that they sort out customer relations as this is the biggest flaw with Merlin and that is why I support a takeover because I am confident that anyone could do a better job than Merlin.

 

[imanautie]

I think that it is very obvious that the RTPs have gone down hill since Merlin went public. This year's travellers choice awards on Trip advisor demonstrates this because Alton Towers came 10th while Thorpe Park, Chessington and Legoland didn't make the top 10. Many local parks beat them by having better customer service despite not having the best rides, this is largely because they don't have shareholders to please so they can focus on making their guests happy. As Lego take over, we can only hope that they sort out customer relations as this is the biggest flaw with Merlin and that is why I support a takeover because I am confident that anyone could do a better job than Merlin.

*kirkbi not lego

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[Thameslink Rail]

Isn't Kirkbi owned by Lego?

 

[Tim]

Other way around. Kirkbi are the major shareholders of Lego (75%).

And they are already Merlin's biggest investors at 30% but if this deal goes ahead will have a 50% majority.

What this means is complicated and not simply Lego taking over Merlin. But I think it is a good thing.

 

[imanautie]

The reason I keep clarifying that it's kirkbi not lego is I think the fact that it was kirkbi and not Lego group taking control shows their focus isn't on legolands.

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[Rick]

Isn't Kirkbi owned by Lego?

Other way around. Kirkbi are the major shareholders of Lego (75%).

And they are already Merlin's biggest investors at 30% but if this deal goes ahead will have a 50% majority.

What this means is complicated and not simply Lego taking over Merlin. But I think it is a good thing.

The reason I keep clarifying that it's kirkbi not lego is I think the fact that it was kirkbi and not Lego group taking control shows their focus isn't on legolands.

KIRKBI own 75% of Lego Group, the other 25% of Lego Group was bequeathed by KIRKBI to the Lego Foundation, which they also (de facto) control.

 

[Tim]

I did wonder how the last 25% was held.

However I don't think it changes the situation that KIRKBI are an investment group that also has holdings outside of the Lego group.
Merlin are changing from Public to Private but Merlin will still exists as their own entity. The LEGO group are not directly taking control. But indirectly they will have a greater say in the company's future.