Notes from a variety of sources:
A good argument for the Busch family buying and spinning off the BEC parks as a solo company has been brought to my attention. I don’t know just how true these facts are however, but from what I was told, the Busch family holds about 5% of the company’s stock, which after the $70 a share InBev offer, will net them just over $2 billion in cash. If there was any doubt, clearly they do have the financial backing to buy the parks if they wanted to.
Some of Britain’s biggest visitor attractions, including Alton Towers and the London Dungeon, are being lined up for a possible merger with the owner of Florida’s Sea World, paving the way for a stock market flotation that could see the combined group head straight into the FTSE100.
Blackstone, the American investment firm, which is a major shareholder in Merlin Entertainments Group, is positioning itself for a tilt at the theme parks unit of Anheuser-Busch, the brewing giant which is in the process of being acquired by the Brazilian company InBev.
InBev plans to dispose of the theme parks business, which is called Busch Entertainment Corporation and owns nine attractions across the US. Earlier this year, Anheuser struck a deal to open attractions in Dubai. The division is assessed by analysts as being worth between $2.5bn and $4.5bn.
Blackstone, which co-owns Merlin alongside Dubai International Capital, is also an investor in Universal Orlando, another of the US’s largest theme parks operators. People close to Blackstone say that if it succeeds with an offer for the Anheuser-Busch parks, it could merge them with either Merlin or Universal, in which NBC Universal, the US media company, is a partner.
Although the market for initial public offerings is likely to remain subdued for some time, the long-term appetite among institutional and public investors to participate in such a flotation is likely to be significant.
Merlin, which also owns Thorpe Park, Legoland and Warwick Castle, already makes sizeable profits, earning more than £200m before interest, tax, depreciation and amortisation in its last-reported financial year.
The company had already been earmarked for a stock market listing in London when the economic environment improves.
Among other operators of attractions, Cirque du Soleil, the touring circus, has also been approached about a potential sale in recent months.
As the sad news about the Anheuser-Busch selling out to InBev has had time to settle in, the rumors and speculation about who may actually buy the Busch Entertainment theme parks has taken an interesting turn. Some have asked me what I thought about some of the other industry players buying the chain, such as Herschend Family Entertainment, Hersheypark, Village Roadshow or even a non-park attraction player like Ripley’s.
Hersheypark is too small in my opinion to take on the Busch chain, though they do have experience with creating a good family fun atmosphere as well as dealing with animals. Herschend would be an interesting fit as well I think, though once again I just think that right now they are too small to take on the kind of debt load that buying BEC would bring down upon them. They also don’t have any solid background experience with exotic animal parks to my knowledge, but if the Busch parks were ever to be broken up and sold individually I could see Herschend or Hersheypark stepping in to pick up a park or two.
Village Roadshow is an average possibility right now, as they own most of the major theme parks in Australia right now and have been going on a buying spree picking up several smaller attractions in the last few months. It’s also worth noting that they also own Sea World Australia… and I’m sure they wouldn’t mind making this copycat park a real true “SeaWorld” branded park after all these years. The big problem here is that I’m just not sure Village Roadshow can come up with cash to buy the entire BEC chain.
Ripley’s in the interesting X-Factor here as well, since they do have experience with sea life through their numerous Ripley’s Aquariums across the country and being able to bring in the SeaWorld brand name and expertise would certainly help. However Ripley’s mainstay is small attractions and not full sized theme parks, so this would be a very major departure from their comfort zone, and not something that I think they would pursue.
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