Business Essentials for Professionals


$6 Billion Deal To Take Madame Tussauds Owner Private Led By Lego Family

$6 Billion Deal To Take Madame Tussauds Owner Private Led By Lego Family
Britain’s Merlin private – the owner of Madame Tussauds and Legoland, is to be taken over again by private equity firm and Lego’s founding family Blackstone in a deal worth $7.5 billion.
It could get a greater scope for “significant, long-term investment” as the Danish interlocking plastic-brick maker expands in China, said the world’s second-largest operator of visitor attractions after Disney on Friday.
The company would be able to invest more in its assets and deliver on growth plans because of the taking off the company from the stock market, said the buyers who already own stakes in Merlin. The taking off of the stock market also marked the biggest European private equity deals in recent years.
“We believe that this group of investors has the unique collective resources necessary to equip Merlin... for their next phase of growth,” said Soren Thorup Sorensen, chief executive of Kirkbi. It is the private investment company of Lego’s Kirk Kristiansen family and it already has a share of 30 per cent in Merlin.
According to announced plans by Lego, which is best known for its colorful plastic bricks, the company would be increasing the m=number of its stores in China to 140 in number. That would be the fastest expansion by the company in any market ever.
In January, Merlin had said that the company was in negotiations with a number of third parties for a number of sites for Legoland Parks in China. There are three Madame Tussauds in China owned by Merlin.
Following a drop in its sales for the first time in decades in 2017, Lego is currently attempting to make its business sustainable through by implementing strategies that brings together its bricks and the digital world.
There was a rise of more than 50 per cent in the shares of Merlin that is also the operator of The London Eye. The company listed itself at London in 2013 and its valuation then was 3.5 billion pound. It reached a peak in June 2017 but  dropped down to below its IPO prices within a period of just seven months after June of 2017. The 2017 London terror attacks and a rollercoaster accident at Alton Towers in 2015 had caused the damage to the company.
According to the deal, after the agreed takeover, 50 per cent of Merlin would be owned by Kirkbi and the companies expect that the deal would get completed by the fourth quarter of the current year. The other shareholders of the rest of the company stock would be Blackstone and Canadian pension fund CPPIB.
“The Merlin independent directors believe this offer represents an opportunity for Merlin shareholders to realize value for their investment in cash at an attractive valuation,” Merlin Chairman John Sunderland said in a statement.
Because of the high investment that are required for the company, Merlin should be taken private, activist investor ValueAct Capital had said last month.
It recognized “significant, long-term investment is required” which is a process that would be much easier for Merlin to implement if it were not listed, said the consortium of buyers said on Friday

Christopher J. Mitchell

Markets | Companies | M&A | Innovation | People | Management | Lifestyle | World | Misc