Merlin Hints At Interest In Buying SeaWorld’s Busch Gardens

Could UK-based Merlin Entertainments be about to make an attempt to buy Busch Gardens from struggling SeaWorld?

Recent reports have suggested that the Florida-headquartered theme park operator has brought in external financial advisers to examine the company, leading to speculation about possible sales and reorganizations.

If this does go ahead, Merlin is likely to be one of the companies interested in the assets.

Speaking after the company’s first-half results, Merlin chief financial officer Anne-Francoise Nesmes said 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’s interest shouldn’t come as a surprise given that one of the six pillars of its current strategy is acquisitions. In 2012 the company acquired Living and Leisure Australia Group to expand into the Asia Pacific region and last year bought a stake in sightseeing company Big Bus Tours.

SeaWorld’s many struggles over the last few years have been well documented. Despite planning to phase out the breeding and showing of killer whales, it is still suffering from the damaging legacy of the Blackfish documentary. 2016 was a very bad year for the company.

Seaworld is due to update the market next week with its second quarter results, which is when we could find out what it intends to do with the business.

Terrorism Impact

Merlin’s first-half results show it is managing to mitigate some of the impact from the recent spate of terrorism in the UK.

In London, which is the biggest market for its Midway Attractions division, the company benefited from the weak pound with foreign visitors showing up in greater numbers but at the same time domestic demand was “immediately and significantly reduced” following the attacks. Merlin said it remained “cautious on international visitation over the key summer trading period given the lag between international bookings and visitation.”

During the first half of its financial year, Merlin saw the number of visitors increase by 6.2 percent to 29.7 million with revenue up 19.4 percent to $893 million (£685 million). Pre-tax profit was unchanged at $65 million (£50 million).

Meanwhile, one of Merlin’s big new investments, Legoland New York, is making progress.

The park, which will be the third under the brand in the U.S., is scheduled to open in 2019 and is going through planning approval at the moment with the Goshen, New York town council. It is set to meet in the next few months to decide.

“The timetable is really dependent on getting that planning application through and we remain positive that it will come through in the later part of this year,” Nesmes said.