Theme parks Merlin IPO fuels talk of Busch parks sale
By Jason Garcia
4:58 p.m. EDT, September 9, 2009
Rumors of a potential sale of SeaWorld Orlando owner Busch Entertainment Corp. were rekindled this week by news that Merlin Entertainments Group, long thought to be a potential Busch suitor, is preparing to go public.
Merlin, whose holdings include Legoland theme parks, Madame Tussauds wax museums and the London Eye, is close to finalizing a plan for an initial public offering on the London Stock Exchange, according to a report last weekend in The Independent of London.
The offering is expected to raise more than $3 billion, the newspaper reported. Merlin is owned by a private-equity giant, the Blackstone Group, which also holds a 50 percent stake in Universal Orlando.
Merlin has long been considered one of the most likely buyers of Busch Entertainment, which has been rumored to be for sale since the merger of beer giants InBev and the Anheuser-Busch Cos. late last year. Representatives from Merlin and Anheuser-Busch InBev discussed a potential bid earlier this year, according to one person familiar with the talks, and there have been rumors that Merlin and Blackstone executives have toured Busch theme parks in recent weeks.
Industry experts say Blackstone could either make the IPO more attractive by buying Busch Entertainment and packaging it with Merlin or use the money raised through a public offering to help finance a purchase of Busch. Analysts have estimated that a Busch sale could fetch anywhere from $2 billion to $4.5 billion.
"It could all fit quite nicely," said Dennis Speigel, president of International Theme Park Services in Cincinnati.
Representatives for Blackstone, AB InBev and Busch Entertainment all declined to comment this week.
John Gerner, managing director of Leisure Business Advisors in Richmond, Va., said Merlin and Busch would make a good combination. Busch owns 10 parks in the U.S., including SeaWorld, Aquatica and Discovery Cove in Orlando and Busch Gardens Tampa Bay.
Merlin is "not very strong in North American and they're strong in Europe, and the opposite is true for Busch," Gerner said.
The Independent reported that Blackstone is considering including its Center Parcs resorts group in a Merlin offering, to ensure that the newly public company is large enough to be included in the U.K.'s benchmark FTSE-100 stock index.
Gerner said Busch Entertainment would be a better fit with Merlin than Center Parcs, a chain of European vacation villages, and would still give the new company enough heft to land it in the FTSE-100.
Source: Orlando Sentinel