Merlin agrees ?6bn sale to investors led by Lego family

28th Jun 2019 07:35

(Sharecast News) - Merlin Entertainments has agreed to be taken private by investors including Lego's founding family and buyout firm Blackstone for almost £6bn in cash.The deal values the owner of Legoland resorts and Madame Tussauds' shares at 455p each - 15.2% more than their closing price on Thursday and a 36.8% premium to the value before one of Merlin's biggest investors called for a sale.The acquisition, recommended by Merlin's independent directors, values the shares at £4.77bn, giving the company an enterprise value near to £5.91bn. It values Merlin at about 12 times the company's £494m earnings for the year to the end of 2018. Merlin shares rose 14% to 450p at 08:35 BST.The deal, one of the biggest European buyouts in recent years, was announced little more than a month after one of Merlin's biggest investors called for the company to find a buyer to take it private. Merlin's board rejected the demand from ValueAct on 23 May. ValueAct, which owns 9.3% of Merlin, has agreed to vote in favour of the deal.Kirkbi and Blackstone said bit, long-term investment was needed to preserve the value of Merlin's operations and keep the company on a path of expansion. Private ownership will allow management to concentrate on strategy, the investors said.Søren Thorup Sørensen, Kirkbi's chief executive, said: "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. We are committed to ensuring Legoland and the other activities in Merlin reach their full potential, which we believe is best pursued under private ownership." Merlin has had a rocky history as a public company since Blackstone and Kirkbi floated it in 2013 after eight years of ownership. The company has issued several profit warnings and was fined and heavily criticised after a rollercoaster accident at its Alton Towers park in 2015 left people with serious injuries.Broker Olivetree Financial said: "This would appear to be a very clean take-private transaction, and it is hard to see what could complicate it. Although there are various anti-trust approvals needed (note China is one), these should be straightforward - and conversely it will be nearly impossible for a third party to interlope against a combination of Kirkbi and ValueAct."