Blackstone et al. agree £4.77bn Merlin take-private

The proposed transaction values shares in Merlin at 455 pence apiece – a 37% premium on the closing price on 22 May 2019 – and gives the company an enterprise value equivalent to 12x its 2018 EBITDA. It would see CPPIB and Blackstone take a combined 50% stake in the group, with Kirkbi taking the remaining stake.

Merlin operates a number of theme parks including Legoland, Thorpe Park, Alton Towers and Gardaland. The business also operates around 100 smaller, indoor attractions based in city centres, shopping malls and resorts, including the Coca-Cola London Eye, Madame Tussauds, The Sydney Tower Eye, Little Big City Berlin and Little Big City Beijing. It has sites across 25 countries.

Kirkbi and Blackstone held a controlling stake in Merlin for eight years prior to a £3.2bn listing in 2013, with CVC Capital Partners also joining the consortium via a 2010 expansion round. Kirkbi currently retains a 29.58% stake in the business.

The newly formed consortium has received irrevocable commitments from the company's directors and ValueAct Capital, amounting to a combined 10% of Merlin's existing issued ordinary share capital.

According to a statement, Blackstone will invest via its long-term private equity platform, with the group's existing portfolio of sites requiring significant investment and the consortium also eyeing further international expansion.

Merlin generated underlying EBITDA of £494m in 2018, according to a statement to shareholders issued by the company.

The transaction is expected to receive shareholder and regulatory approval by the end of 2019.

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