Merlin recommends £4.8bn buyout from consortium

Discussion in 'European Parks and Attractions' started by Lurker, 23rd May 2019.

  1. Rob

    Rob TS Forum Team Team Member

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    Interesting news to say the least! It cannot be denied that the worst years at Merlin's theme parks have come whilst the company has been floated on the stock market. So it is pleasing to see that coming to and end. Are we suddenly going to see lots of fresh investment in to the RTP division? I doubt it. But there will likely be a complete review and evaluation of how Merlin operate.

    Having said that, Kirkbi are already an existing major shareholder of Merlin. So they may be generally happy with how things are going meaning less chance of any substantial changes.
     
  2. ringo

    ringo TowersStreet Member

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    I wouldn’t be surprised if we see Varney staying put especially as they say no significant changes.
     
  3. Matt N

    Matt N TowersStreet Member

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    Out of interest, who owned Merlin prior to this takeover? As I was under the impression that Blackstone and Kirkbi already had quite a high stake in Merlin.
     
  4. Doublethink

    Doublethink TowersStreet Member

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    We already knew the UK RTP had basicly nothing new planned for next season and I doubt that will change but hopfuly we will start to see investment in the long term of the parks e.g monorail changes for alton and bringing up the standard of decrepid transylvania and cloud cookoo land
     
  5. Craig

    Craig TS Administrator Team Member

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    Blackstone owned Merlin after it bought them back in 2005. They then floated in 2013, with Blackstone getting rid of their final shares in 2015.

    Kirkbi have had a just under 30% stake in Merlin, so are essentially buying up another 20% in this deal.
     
  6. Alsty

    Alsty TowersStreet Member

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    At my previous job, our PLC got taken over by a private equity company. We were assured there would be no significant changes. However the managing director left within the week and the remaining board of directors soon followed as they considered them incompatible with their new vision. Maybe that makes sense. If your leadership don't share the direction you want to go, it's time to replace them.

    However we don't know the intentions or vision of Blackstone/Kirkbi. In the short term they'll likely just take stock of things first and observe how the business runs, even if they want to change things.
     
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  7. TakeYourMedicine

    TakeYourMedicine TowersStreet Member

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    I don't actually see that being a good thing. I don't think The (real) Merlin Way ™ is a result of Nick Varney alone although of course he had a massive part in turning the company into what it is today

    After what Merlin has now turned into, who knows if there's anybody else with the integrity or experience to run it better from the top. What it probably needs most is to no longer be a monopoly and have better overall park strategy than it has in the past 10 years

    Going back to private I can only see being a good thing though, even if it's just back to the 2009–2014 status quo
     
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  8. Doublethink

    Doublethink TowersStreet Member

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    Hopefully their aim won't solely be adding more rooms to parks where the accommodation is never full like the Stargazing Shacks and prommising a guest satisfaction level that is guaged by Ipads that conveniently stop working when the parks are having a bad day....
     
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  9. Rob

    Rob TS Forum Team Team Member

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    I'm not even sure if Varney is the problem at Melrin so who knows whether him staying or going will make a difference. Kirkbi are gaining a bigger share of the company and Blackstone are coming back on board; both have happily worked with Varney for a long time previously.
     
  10. Matt N

    Matt N TowersStreet Member

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    Ah right. Thanks for the clarification @Craig!

    This deal could be interesting; should open up additional money for theme park investment now they don't have shareholders to pay!
     
  11. Robert Jones

    Robert Jones TowersStreet Member

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    Having recently been on the receiving end of a company being bought out and shifted out of the UK (the office officialy closes today funny enough) I have seen the asset stripping nature of Blackstone, although it must be said it seems they were doing work TR wanted them to. So it probably depends on the desire of the Kirkbi family whether this is good news outside of the Lego brand.

    Neither owners seems to fill me with dread or happiness but I wouldn't celebrate too early. As I've said elsewhere I can't see them handing out blank cheques to the Mack family anytime soon.
     
  12. GaryH

    GaryH TowersStreet Member

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    I'm going to try and stay positive about this news, I mean things are pretty bad now, surely they couldnt get any worse?! :nomouth:
     
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  13. Craig

    Craig TS Administrator Team Member

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    A few interesting quotes from the announcement:

    "The Consortium recognises that significant, long-term investment is required to ensure the longevity of the existing assets and to drive continued growth for Merlin and its stakeholders."

    "This unique group of investors is equipped with the appropriate long-term investment horizon, expertise and capital required to realise Merlin's potential to grow all branded experiences across its Midway Attractions, LEGOLAND® Parks and Resort Theme Parks."

    With the quote about not wanting to split the group up, on the face of it this sounds pretty positive.
     
  14. Matt N

    Matt N TowersStreet Member

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    Will the company still be public, or is it taking all of its shares off the London Stock Exchange?
     
  15. Craig

    Craig TS Administrator Team Member

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    No this will take the company back to being private, which is what ValueAct had recommended when this topic was initially created :p
     
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  16. Matt N

    Matt N TowersStreet Member

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    Ah right. Thanks for the clarification @Craig; I only asked because I'd heard people saying things like "don't get too excited; this is just a change in shareholders".
     
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  17. evilcod

    evilcod TowersStreet Member

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  18. Craig

    Craig TS Administrator Team Member

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    Ultimately they will be shareholders, but in a private company (50% Kirkbi (Lego) and 50% CPPBI and Blackstone). However, the benefit in having fewer shareholders with larger holdings is that they need to make big changes to increase the value of their investment - there's not as much of a push for quick changes to pump out dividends to thousands of individual shareholders.

    Blackstone spent an absolute fortune after acquiring Merlin Entertainments buying Legoland, Tussauds and Gardaland so there'll no doubt be some big bucks being spent this time around. The fact they've already stated they're in it for the long term and accept that significant investment is required sounds pretty positive to me. That would seem to indicate they're wanting to develop existing attractions in their portfolio rather than just buying up others to expand value.

    In any case, it can't get any worse than the current situation, and having investment vehicles such as Blackstone and Kirkbi coming onboard is pretty much the only way Alton and other resort theme parks can get out of the rut they're in.
     
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  19. TakeYourMedicine

    TakeYourMedicine TowersStreet Member

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    Following what Craig explained there won't be additional 'free' money now that the structure will change, but bigger private shareholders will behave differently and have different demands (hopefully allowing for better longer term plans) than lots of public shareholders, which forces the company to prioritise short term decisions. Although Lego's presence remained big even when it was public at 1/3, so the biggest change is Blackstone coming back in.

    I've been hoping Merlin would go back to private for years but will wait to see if there's any genuine positive change. This doesnt just affect Merlin behind the scenes (which would otherwise be none of our business) but the entire UK theme park industry since Merlin practically control every aspect
     
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  20. ihaveaspergers

    ihaveaspergers TowersStreet Member

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    Did you have a private owner on mind?

    Sent from my Swift 2 Plus using Tapatalk
     

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