Multi-billion swoop for Edinburgh Dungeon owner Merlin

Edinburgh Dungeon owner Merlin Entertainments has agreed to a near-£5 billion takeover from Lego's owners, a private equity giant and a Canadian pension fund.

Friday, 28th June 2019, 08:33 am
The popular Edinburgh Dungeon is one of the many leisure attractions owned by Merlin. Picture: Ian Rutherford

Merlin, which has a vast leisure portfolio spanning the likes of Madame Tussauds, Alton Towers, Legoland and the London Eye, has accepted 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, marking a 15 per cent premium on the FTSE 100 firm's 395p per share value at the end of trading on Thursday, and valuing the business at some £4.77bn. The deal also includes £1.2bn of debt giving the group an enterprise value of just under £6bn. 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 per cent stake in the entertainment and theme park business. Merlin floated on the London Stock Exchange six years ago, at an initial price of 315p per share.

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.

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"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."

Sunderland said the board unanimously recommended the deal to the company's shareholders.

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.

"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, in order to deliver fantastic experiences to visitors of all ages around the world."