Madame Tussauds owner Merlin agrees £5.9bn takeover deal
Merlin Entertainments has agreed the offer from Lego’s owners, a private equity giant and a Canadian pension fund.
Madame Tussauds owner Merlin Entertainments has agreed a £5.9 billion takeover bid from Lego’s owners, a private equity giant and a Canadian pension fund.
Merlin, which also owns attractions such as Alton Towers and Legoland, has agreed the bid from Kirkbi, the investment vehicle of Lego’s Danish founding family, Blackstone and pension fund Canadian Pension Plan Investment Board (CPPIB).
The deal values the company at 455p per share, representing a 15% premium on the FTSE 100 firm’s 395p per share value at the end of trading on Thursday, giving the group a total enterprise value of £5.9 billion.
Merlin said it had rejected a number of previous takeover proposals.
Kirkbi, which is backed by the billionaire Kiristiansen family, currently owns an almost-30% stake in the entertainment and theme park business.
Merlin floated on the London Stock Exchange only six years ago, at an initial price of 315p per share.
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 Sir John Sutherland, Merlin Entertainments
Chairman Sir John Sunderland 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 company has generated meaningful value since its IPO (Initial Public Offering), 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.”
Mr Sunderland said the board unanimously recommended the deal to the company’s shareholders.
Last month, activist shareholder ValueAct Capital, which holds a 9.3% stake in Merlin, called on the company to find a private buyer.
Soren Thorup Sorensen, chief executive of Kirkbi, said: “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.
“With a shared understanding of the business and its culture, 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.”
Fiona Orford-Williams, analyst at Edison Investment Research, said: “This deal makes a lot of sense for both parties.
“Merlin will be able to undertake the investment projects needed to bring the attractions up to the standards that can deliver high-quality, exciting experiences for visitors in a longer-term payback scenario. Lego gets to diversify its attractions portfolio.”
Shares in Merlin in jumped by 13.9% to 450p in early-morning trading.