A consortium of investors comprising KIRKBI Invest A/S, a wholly-owned subsidiary of KIRKBI A/S, which is the family company and owner of the LEGO® brand along funds managed as part of Blackston, and Canada Pension Plan Investment Board has announced that it has agreed the terms of a recommended offer to purchase for Merlin Entertainments plc. What do this have to do with LEGO I hear you cry. Well LEGOLAND parks and Discovery Centres across the world are owned by Merlin, with the LEGO Group holding around a 30% stake in them as well. This now means in essence, that LEGO now controls the full rights to LEGOLAND resorts, as well as popular UK attractions such as the Coca Cola London Eye, Alton Towers, Thorpe Park and Sea Life Centres: as well as similar brands in other countries. Hopefully with KIRKBI and the LEGO Group now having a more active role in Merlin, we may see improvements to existing LEGOLAND attractions, new locations and maybe even see the LEGO brand used in other non-LEGOLAND Merlin attractions. You can read the full press release here.
KIRKBI, BLACKSTONE AND CPPIB AGREE TERMS OF A RECOMMENDED OFFER FOR MERLIN ENTERTAINMENTS PLC
- Recommended offer price of 455 pence per share values Merlin at £4.77 billion, representing a 37 per cent premium to the closing price of 22 May 2019.
- The Consortium comprising KIRKBI Invest A/S, Blackstone and CPPIB has received irrevocable commitments from ValueAct Capital and the directors of Merlin.
- The Consortium recognises that Merlin requires significant, long-term investment for the next phase of growth. The Consortium is a unique group of investors equipped with the appropriate long-term investment horizon, expertise and willingness to increase capital investment to deliver this.
London, 28 June 2019 – A consortium of long-term investors comprising KIRKBI Invest A/S (“KIRKBI”), a wholly-owned subsidiary of KIRKBI A/S, the ultimate owner of the LEGO® brand, funds managed as part of Blackstone’s long-dated “Core” private equity strategy (“Blackstone”), and Canada Pension Plan Investment Board (“CPPIB”; together, the “Consortium”1) is pleased to announce that it has agreed the terms of a recommended offer for Merlin Entertainments plc (“Merlin” or the “Company”).
The recommended offer is made by the Consortium at a price of 455 pence per share in cash, for the entire issued and to be issued share capital of Merlin, other than those Merlin shares already owned by KIRKBI, which is an existing 29.58 per cent shareholder in the Company. KIRKBI has agreed to work exclusively with the other members of the Consortium in relation to the offer.
The offer will be made by a newly incorporated company which has been formed on behalf of the members of the Consortium, with each of KIRKBI and the Blackstone/CPPIB group owning 50 per cent upon completion.
The recommended offer values Merlin at approximately £4.77 billion, providing Merlin’s shareholders with the certainty of cash at a 37 per cent premium to the closing price of 333 pence per Merlin share on 22 May 2019 (being the last business day before the publication of ValueAct Capital’s letter to the board of Merlin which suggested that Merlin should be taken private).
This is a multiple of 12.0x 2018A EBITDA and equates to a 31 per cent premium to the six-month VWAP4 to 22 May 2019. The recommended offer has received irrevocable commitments in respect of an aggregate 10.0 per cent of the existing issued ordinary share capital of Merlin, and 14.2 per cent of Merlin shares being eligible to vote in favour of the recommended offer, including from ValueAct Capital.