Merlin reportedly considering purchase of SeaWorld Entertainment

Posted Thursday, October 5, 2017 8:12 AM | Contributed by Jeff

Merlin Entertainments Plc has approached SeaWorld Entertainment Inc. about a potential deal, according to people familiar with the matter, as the U.K. theme-park operator seeks to expand overseas to offset a slide in tourists visiting London. Merlin has made a bid for part of the company, which could be a hurdle as SeaWorld prefers an outright sale, the people said.

Read more from Bloomberg.

Thursday, October 5, 2017 12:08 PM

There was a thread on the potential sale of Seaworld back in early August. Back then we touched on the idea that Merlin would be most likely interested, but the question would be if they would want all of it, or just half. And if it was just half, would it be the Seaworld or Busch Gardens half?

My guess is that they just want the Bush/Sesame side of the group, and don't want the Sea parks. Thus the hesitation referenced in the article. It would seem that the Busch/Sesame side is the easier part to sell off, as it doesn't have the "Blackfish" overhang.

It's a guess of course, but if it were the other way around, that Busch/Sesame parks would be an easy sale as they aren't hobbled with the "whale" issue. Those parks would make a better bundle for anyone else looking to pick them up (a current operator or even a Private Equity group). Of course it may also be that divesting of the Sea parks leaves too little profit to support the current (or hypothetical) remaining corporate overhead, and thus just having the Busch/Sesame parks isn't acceptable to those that will remain behind.

That's a thought, but I'd put my money on Merlin wanting just the Busch side

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Thursday, October 5, 2017 12:46 PM
slithernoggin's avatar

Mostly I agree, but...

Merlin, according to its website, includes 50 aquariums. (Herschend and Landry also have aquariums in their portfolios.)

The argument could be made that, under new management, the SeaWorld parks could remake their image. Merlin could come in and say "we responsibly operate 50 aquariums, we understand how to operate aquatic attractions, and will bring that expertise to the SeaWorld parks."

But, yeah, I think Merlin wants the Busch and Sesame parks.


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Thursday, October 5, 2017 1:43 PM
Jeff's avatar

I don't agree at all. The revenue and assets of the Orlando parks alone is worth more than probably the rest of the chain.


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Thursday, October 5, 2017 2:37 PM
Tekwardo's avatar

Merlin, as stated in the article, has a no porpoise policy. So if they’re interested in the SeaWorld half, looks like they’ll get rid of dolphins and killer whales.


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Thursday, October 5, 2017 5:21 PM

That would be suicide. At the San Antonio park, the whale show, dolphin show, and dolphin exhibit are like 50% of the park’s major attractions.

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Thursday, October 5, 2017 6:35 PM
Tekwardo's avatar

Which probably means they’re not interested in the SeaWorld half...


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Thursday, October 5, 2017 8:03 PM
ApolloAndy's avatar

Tekwardo said:

Merlin, as stated in the article, has a no porpoise policy.

Porpoise lives matter.


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Friday, October 6, 2017 1:08 AM

bloomberg article which hints that Merlin is going after the Busch parts, but doesn't flat out say it.

https://www.bloomberg.com/news/articles/2017-10-04/legoland-owner-m...about-deal

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Sunday, October 8, 2017 12:12 PM

Merlin is absolutely only interested in owning/operating the Busch/Sesame part, but the question is are they interested enough to buy it whole and then try to piece off the SeaWorld parks, or will the new Chinese majority holder/owner push to sell off the Busch side alone. Merlin definitely wants the ability to bundle BGT and LEGOLAND, and the one SeaWorld park I could see them holding onto is SD just because of how the California government and activists are pushing it closer to how Merlin would have it anyway (minus whales and dolphins), which would make an amazing vacation bundle for LEGOLAND out there. San Antonio and Orlando are so reliant I think on the product differentiation of the large animals and associated shows for their markets that doing away with them completely gimps them beyond repair, and they know that.


Original BlueStreak64

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Sunday, October 8, 2017 4:31 PM

Rightly or wrongly, Merlin could basically be inviting the vampire into the house if it were to buy any of the Sea parks. Merlin's strong international focus means that it operates in areas which have long traditions of "green" and "environmentalist" action. It's not a far leap to imagine a newly invigorated "Blackfish" style PR Campaign popping up at their various attractions, essentially dragging them into a debate for which up until now, they've not been a combatant.

Again, rightly or wrongly, a well orchestrated, visible action could generate tons of LOCAL bad publicity, across most of Europe. Whale/Porpoise/whatever proponents could sense an opening in their battle, assuming that Merlin might not be 100% committed to the (hypothetically) former SEAS' plans with respect to cetaceans. Therefore an immediate, newly invigorated, and vocal protest action could show up on Merlin's doorstep without warning. Merlin might be very wary of a purchase of any of the SEA parks, unless an immediate transition program is in place. Even then it's a fine dance with, let's be honest, less than stable dance partners.

Again, I'm not arguing the merits of PETA's Blackfish or other animal rights arguments, simply pointing out the reality that Merlin must analyze this before making any purchase of a SEA park.

Last edited by CreditWh0re, Sunday, October 8, 2017 4:51 PM
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Sunday, October 8, 2017 4:48 PM

MaXairMike mentions the potential synergies of Legoland pairings with BGT or Seaworld SD. Conceptually that sounds good but I'm not so sure about actual practice.

BGT and Legoland Florida are approximately 52 miles apart on the heavily congested I-4 corridor; Legoland California and Seaworld are 35 miles apart on the miserable I-5 through suburban San Diego county. Legoland Florida is actually closer to Seaworld Orlando, but one has to pass Disney to get there. It's not like these are just on the "other side of town" from one another, or a simple "resort bus ride" away.

Definitely they're close enough to "market" each other, but it can't be stressed enough that Legoland targets a market up to about age 9. There's not a ton of overlap between BGT and Legoland target markets. If you've got little ones you might not think BGT is a good mix, and if you've got tweens and up, Legoland is a definite no. It's not like the obvious combo of Seaworld Orlando and BGT. The synergy makes a bit more sense with San Diego, proximity and as mentioned, the Cal park's earlier moves towards reduced "whale" components. But again, that's a Sea park with all of the potential baggage, and it's not what rumours would suggest Merlin is doing.

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Sunday, October 8, 2017 5:08 PM

Not sure what happened to Rick M. at Motley Fool. This is perhaps his most cogent article in years. Something something blind squirrel.

https://www.fool.com/investing/2017/10/06/seaworld-may-have-more-su...think.aspx

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Sunday, October 8, 2017 6:21 PM
Morté615's avatar

Legoland Florida is actually closer to Seaworld Orlando, but one has to pass Disney to get there. It's not like these are just on the "other side of town" from one another, or a simple "resort bus ride" away.


Merlin already runs a shuttle bus from Legoland FL to the Orlando Eye, where they pass both Disney and SeaWorld. So adding a stop at SeaWorld, which is 10 minutes or so from the Orlando Eye, would be a rather easy thing.

No other input so far :)


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Sunday, October 8, 2017 10:48 PM

CreditWh0re said:

MaXairMike mentions the potential synergies of Legoland pairings with BGT or Seaworld SD. Conceptually that sounds good but I'm not so sure about actual practice.

BGT and Legoland Florida are approximately 52 miles apart on the heavily congested I-4 corridor; Legoland California and Seaworld are 35 miles apart on the miserable I-5 through suburban San Diego county. Legoland Florida is actually closer to Seaworld Orlando, but one has to pass Disney to get there. It's not like these are just on the "other side of town" from one another, or a simple "resort bus ride" away.

Definitely they're close enough to "market" each other, but it can't be stressed enough that Legoland targets a market up to about age 9. There's not a ton of overlap between BGT and Legoland target markets. If you've got little ones you might not think BGT is a good mix, and if you've got tweens and up, Legoland is a definite no. It's not like the obvious combo of Seaworld Orlando and BGT. The synergy makes a bit more sense with San Diego, proximity and as mentioned, the Cal park's earlier moves towards reduced "whale" components. But again, that's a Sea park with all of the potential baggage, and it's not what rumours would suggest Merlin is doing.

I'm pretty sure Merlin is more interested in "bundling" BGT with LEGOLAND in that they do a ridiculous amount of business locally with school groups and what not, a group of visitors with a likely large overlap in visits to BGT. Plus, both parks draw a lot of local guests (I would honestly venture that more than half of each park's visitor base are regional residents). I think they see an opportunity with BGT in their pocket of locking in a constant, reliable base of visitors for the entire west central Florida region.

Oddly enough, it does seem that hotels at BGT are getting a lot closer to reality, a strategy that fits perfectly with what Merlin is trying to push at LEGOLAND (I have my personal doubts, but we'll see how things turn out as they keep pushing and building). Sure, the trip between the two parks can be unnecessarily long on I-4, but SW already runs a shuttle to BGT, a much farther trip with just as bad or worse traffic through the attractions area to deal with. It doesn't have to be convenient enough of an option that locals would use it, just convenient enough for guests staying at one park's hotel to add another day for the other park. I think it makes that grade.


Original BlueStreak64

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