Is Busch Gardens About To Be Sold To The Owners Of Legoland?

mag813 August 9, 2017 0
Is Busch Gardens About To Be Sold To The Owners Of Legoland?

Merlin Entertainments, owner of Legoland, is interested in buying Busch Gardens from its troubled parent company, SeaWorld Entertainment.

Merlin’s chief financial officer disclosed the interest during a conference call with analysts Monday. SeaWorld — which owns 12 theme parks and water parks, including the original Busch Gardens in Tampa and a second Busch Gardens in Williamsburg, Va. — released second-quarter results Tuesday morning that showed a $175.9 million loss.

SeaWorld has struggled with plunging profits after the damaging documentary “Blackfish” came out in 2013 and public sentiment shifted against the company’s handling of killer whales. Despite planning to phase out the breeding and showing of killer whales, attendance continues to decline. It has tried to shift its focus to rides and announced an end to its orca breeding program. Theatrical performances are being restaged in favor of more nature-based encounters.

Last week SunTrust analyst Michael A. Swartz said that SeaWorld could generate $800 million to $1 billion if it sold off its regional parks such as Busch Gardens.

Meanwhile, Merlin chief financial officer Anne-Francoise Nesmes said during an earnings call Monday it was keeping a close eye on Busch Gardens.

“It takes two parties to do a deal. So we do not know what SeaWorld’s intentions are, but we do believe that those assets (Busch Gardens) are interesting and we could certainly do a lot with them particularly around accommodation. So to us it’s about having the right discussion with a willing partner and making sure we have the right financial return,” Nesmes said.

Merlin, which is based in the United Kingdom, has enjoyed healthy growth in recent years at its eight Legoland theme parks around the world (including LegoLand Florida in Winter Haven) and its other tourist attractions, including Madame Tussauds, the London Eye and the recently opened Orlando Eye. In Monday’s report, Merlin said the number of visitors to its attractions increased by 6.2 percent to 29.7 million with revenue up 19.4 percent to $893 million for the first half of the year.

Recent reports have suggested SeaWorld has hired investment adviser Evercore to find a potential buyer. SeaWorld has so far offered no comment on reports by the Deal Reporter, a financial news service, on the Evercore hiring. Evercore is known as a firm specializing in mergers and acquisitions, restructurings, public offerings and private placements.

In Tuesday’s earnings report, said it lost $2.05 per share. Earnings, adjusted for asset impairment costs, were $1.09 per share.

The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of 31 cents per share.

The theme park operator posted revenue of $373.8 million in the period, missing Street forecasts. Eight analysts surveyed by Zacks expected $398.4 million.

SeaWorld shares have fallen 28 percent since the beginning of the year. The stock has increased 3 percent in the last 12 months.

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