LEGO family expands empire with Merlin Entertainments (MERL) offer

Share prices rises, almost matching the offer from the consortium of investors.

Article updated: 28 June 2019 11:00am Author: Graham Spooner

  • Share price rises on the back of the takeover announcement.
  • Consortium of investors pay 15% premium for the shares.
  • Offer comes a month after activist investor believed the market was undervaluing the business.

A consortium of investors has made an agreed 455 pence per share offer for the leisure group who owns LEGOLAND Resorts and Madame Tussauds - a 15.2% premium over yesterday’s closing price. Interestingly one of the consortium members is from the family company that owns a majority stake in LEGO, meaning if it goes through it will now own LEGOLAND, a case of literally building an empire.

The other members are a Canadian pension fund and well-known US private equity group Blackstone. The offer again highlights the appetite among cash rich private equity for new deals. This news also follows the emergence of an activist investor who had taken a stake and was vocal in stating that the business was undervalued.

Upon the news of the takeover, shares rose by 14% to 450 pence and after six years on the market it seems Merlin’s magic wand is set to be waved no more.

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Graham Spooner

Investment Research Analyst

Graham started out as a fully authorised dealer on the Stock Exchange trading floor and for various banks, before becoming an FSA-approved investment adviser. Now a respected voice in the media, Graham’s share tips and comments on the markets are frequently sought by the national press.