LEGOLAND buyout unlikely to delight shareholders

While the LEGO Group’s founding family might be keen to buy Merlin Entertainments and the LEGOLAND parks, the shareholders are less likely to be happy about the move.

Shareholders are not likely to be overjoyed that the LEGO Group’s owners and Blackstone, along with CVC, want to take Merlin Entertainments – and the LEGOLAND parks that are part of the company – private.

It was Blackstone that listed Merlin Entertainments on the stock market in the first place. Earlier today, it was announced that the LEGO Group’s founding family has made an offer to buy out Merlin with the help of private investors, valuing the company at £4.77 billion.

The Financial Times provides context to the sale, pointing out that weak UK tourism and the Alton Towers accident meant that the share price suffered just two years after the company was listed. A profit warning two years ago saw the share price drop, meaning that some shareholders will now be frustrated that the valuation is based on the lower subsequent price. “A listing then buyout within six years has no doubt delighted bankers and advisers,” the FT’s piece points out.

The article suggests that the reason for the purchase by the Kristiansen family is down to protecting the brand, as their share of the business increases from 30% to 50%, rather than being about long term investment as today’s announcement suggested.

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Graham was the Editor up until November 2020. He has plenty of experience working on LEGO related projects. He has contributed to various websites and publications on topics including niche hobbies, the toy industry and education. Follw Graham on Twitter @grahamh100.

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