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Madame Tussauds owner Merlin sold to Lego family fund for £5.9bn | Business News



Madame Tussauds owner Merlin Entertainments has accepted a £5.9bn takeover offer from the family owners of Lego and the private equity firm Blackstone.

Merlin, which also owns the Alton Towers and Legoland attractions, accepted the bid from Kirkbi, the investment vehicle of Lego’s Danish founding family, Blackstone and Canadian pension fund CPPIB.

The takeover has valued the company at 455p per share, representing a 15% increase on the FTSE 100 firm’s 395p per share value at the end of trading on Thursday.

Having rejected a number of previous takeover proposals, Merlin’s shares surged 14% to just over 450p when markets opened on Friday, at the prospect of the company going private.

Sir John Sunderland, chairman of Merlin, said: “Merlin is a global leader in location-based, family entertainment, with a unique portfolio of brands and attractions spanning 25 countries and four continents, and with a proven strategy that has delivered over many years.

The new ride was forced to close on opening day. Pic: Legoland
The Merlin Entertainments portfolio includes Legoland which will return to its Danish roots

“The company has generated meaningful value since its IPO with significant growth in revenue, earnings and cash flow.

“Following an unsolicited approach by a consortium of investors, and after rejecting a number of their proposals, 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.”

The accepted bid comes after a torrid few years for the theme park owner, in which a number of its rides failed and passengers sustained injuries.

Merlin was fined £5m for a “catastrophic failure” of health and safety rules over an incident on its Smiler rollercoaster at Alton Towers in June 2015, when two carriages collided and several people were seriously injured.

The incident lead to the temporary closure of rides at its Chessington World of Adventures and Thorpe Park resorts.

Six months earlier Merlin pleaded guilty to breaching health and safety laws after a child fell from its Tomb Blaster ride at Chessington World of Adventures.

It was fined £150,000 for the incident that happened in June 2012.

After reeling from the cumulative effects of blows to its reputation, Merlin did not recover the high number of visitors to its attractions until recently.

The company was able to capitalise after the pound dropped following the EU Referendum in June 2016 and the weaker sterling drew record numbers of overseas tourists.

The Smiler rollercoaster at the UK's Alton Towers theme park
The Smiler rollercoaster at Merlin’s Alton Towers theme park

The company said it saw a “record” 67 million visitors across its attractions in 2018, up 1.4% on 2017 numbers.

Merlin’s underlying annual pre-tax profits were £289m in 2018, up 6.5% on the previous year.

Group revenue for 2018 was £1.7bn, up 5.9% on 2017.

George Salmon, equity analyst at Hargreaves Lansdown said: “The deal means ownership of Merlin is going full circle, and back to a consortium including former owners private equity group Blackstone and KIRKBI, the LEGO family investment company.

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

“Nonetheless, stock market investors have generally made a healthy return, with those investing from day one enjoying a 44% gain plus a healthy stream of dividends.”

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