Merlin Entertainments approves £6bn bid from Lego family

Legoland takeover Merlin Entertainments
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Following the group’s acquisition of Legoland in 2005, the Lego family investment firm Kirkbi has returned the favour, agreeing “an attractive valuation” for UK-based attractions operator Merlin Entertainments.

 

Lego owner Kirkbi has agreed a £5.9bn acquisition of Merlin Entertainments, after the Thorpe Park operator’s board unanimously approved the bid, the latest in a series of purchase proposals.

Having secured almost 30 percent interest in Merlin after it obtained the Legoland brand fourteen years ago, Kirkbi enlisted private equity firm Blackstone and investment firm CPPIB to present the takeover offer.

“Merlin is a global leader in location-based, family entertainment, with a unique portfolio of brands and attractions spanning 25 countries and four continents,” said Merlin chairman Sir John Sunderland.

“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.”

Valuing the Madam Tussauds, Sea Life, Alton Towers and Chessington operator’s shares at 455p, the deal presents a 15 percent increase on the group’s previous FTSE 100 markup.

“As the long-term owner of the Lego brand and as a strategic shareholder in Merlin since 2005, we have great pride and passion for this amazing company, its management team and its employees,” said Kirkbi CEO Søren Thorup Sørensen.

“We believe that this group of investors has the unique collective resources necessary to equip Merlin, including the Legoland Parks and Legoland Discovery Centres, for their next phase of growth.”

The agreement follows the March announcement by Merlin of a 5.2 percent increase in revenue for 2018, with the Legoland Parks brand revenue rising 6.4 percent, and the Resort Theme Parks subsidiary experiencing a 9.1 percent jump in takings.

However, Hargreaves Lansdown equity analyst George Salmon noted that the operator – which owns 120 attractions worldwide, including 18 hotels and six holiday villages – still had the potential to increase revenue in line with previous performance.

“Perhaps fittingly, it has had plenty of ups and downs during its six years on the UK stock market.”

“An enchanting long-term roll out story ensured the shares enjoyed a couple of strong years initially, but the impact of terror attacks in London meant the magic wore off and the agreed price in this deal is lower than where the stock traded at as recently as October 2017.”


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