Private equity is looking at bigger targets

Leisure group Merlin Entertainments, best known for Legoland Resorts and Madame Tussauds wax museums, is to be acquired in a £6 billion deal by the Danish family that controls toymaker Lego, private equity group Blackstone and a Canadian pension fund. The deal marks one of the largest European buyouts in recent history and comes at a time when private equity funds are flush with cash and looking at bigger targets… The consortium revealed yesterday that it would pay 455p in cash per Merlin share, a premium of 15 per cent over its close of 395p on Thursday. The offer values Merlin’s shares at more than £4.7 billion, or close to £6 billion including debt. Merlin’s roots date back to 1979, when it was the attractions arm of leisure group Vardon. The division expanded across the UK and Europe before its management group led a £47 million buyout of Vardon’s attractions divisionto form Merlin in 1999. It then changed hands in 2004 and 2005, first to private equity group Hermes and then to Blackstone and Kirkbi. In 2013 it was listed on the London Stock Exchange… The deal involves Kirkbi, the investment vehicle of Lego’s founding family that owns close to 30 per cent of Merlin shares, teaming up with Blackstone and pension fund CPPIB. Kirkbi owns a 75 per cent stake in Lego.
Javier Espinoza, Arash Massoudi, Alice Hancock and Eric Platt