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Merlin Entertainments

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https://www.ft.com/content/1fd64b50-156f-11e8-9376-4a6390addb44

 

Quote

In November last year, Numis Securities said a break-up of the business could unlock value for investors, arguing Merlin should consider splitting its theme parks and Legoland franchise away from its “Midway” portfolio of city-centre attractions such as Sea Life and Madame Tussauds, where like-for-like growth has stalled.

(article from Feb 2018)

Basically, investors want to make it more cash grabbing than it already is. As the company is owned by many large investment companies, I highly doubt the company actually cares about its guest experience and is too focused on pleasing investors that they forget about the necessities an entertainments venue should have (cleanliness, attractions actually open and working etc.). Perhaps that's why places like BPB and Paultons seem to be doing better reviews and visitor wise as they're more connected to their customers.

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https://blooloop.com/news/merlin-entertainments-senior-management-changes-fiona-eastwood/

 

Merlin is having a bit of a senior management change-up, noteable:

 

"Fiona Eastwood will move from her role as Managing Director, Resort Theme Parks to become Managing Director of Midway."

 

"Ian Crabbe, currently Divisional Director, Alton Towers Resort, will assume responsibility for Resort Theme Parks. With over 20 years’ experience at Merlin, Ian has recently overseen the management of both Alton Towers and Thorpe Park."

 

A new role of Resort Development Director is being created too.

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You have to admit it was pretty funny seeing someone strut their VIP pass on a lanyard while acting like they're some sort of celebrity around the park, I think with that its sad to see the loss of free comedy that we all received from this incredibly idiotic product. 

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Interesting news today that ValueAct who is an activist investor (owns 9.3%) in Merlin wants to take the firm private following a fall in its share price. 

The board doesn't want to go private but as ValueAct has such a high percentage ownership it will be hard for them to ignore the pressure.

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https://www.bbc.co.uk/news/world-48700496

 

Merlin have, after many years of planning, moved two whales from an aquarium in China to a whale sanctuary in Iceland.

 

Animal welfare is still a developing issue in China, and aquariums/oceanariums with whale shows aren't unusual. Merlin bought the Changfeng Ocean World Zoo in 2012 and rebranded it into a Sealife Shanghai, and committed very early to improving animal welfare and ultimately moving the whales, despite the massive popularity of the show. Indeed, Merlin don't actually list Sealife Shanghai anywhere on the Sealife website, and you have to do some digging to find out that they own/run it. 

 

The movement to the sanctuary had hit a couple of delays and was an expensive, logistical nightmare, but is now finally done.

 

I don't know the long term plan for Sea Life Shanghai, but I imagine they're going to continue bringing it in line with other Sea Lifes, and further push education of animal welfare in China.

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So the VIP pass got stopped and now individual parks are rolling out their own starting with Legoland! 

 

Called Club VIP which is supposedly invitation only (but allows you to register interest on the page) it offers the following

 

Club VIP

Unlimited entry to the LEGOLAND®Windsor Resort.

Gold wristband for instant ride access on every visit.

Preferred complimentary room upgrades where available.

Complimentary preferred parking.

20% discount on dining.

10% discount on LEGO® purchases on Resort.*

A LEGO gift on your birthday.

2 guest day passes (Additional guest passes available for £100).

Complimentary hot and cold beverages (in a souvenir cup).

One pre-booked entry to our VIP fireworks.

Calendar invites to exclusive events.

£650 per membership

(12 Month Membership)

 

What are your thoughts of this. It can be found on the VIP experiences page of Legoland website. 

 

https://www.legoland.co.uk/tickets-and-passes/vip-experiences/view-all-vip-experiences/#clubvip

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The new VIP thing doesn’t surprise me in the slightest.  The VIP passes did seem a lot of money but in reality the pass holders got a lot in return for that and it looks like Merlin are going for individual park VIPs to bring in the cash. There will be people who will buy them I’m sure - loads of VIP holders annoyed that the passes got stopped.  I have no problem with VIPs but really wish it was renamed something different and for the love of God I hope they don’t have VIP lanyards 

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Oh, so they weren't doing away with it to improve guest behaviour and/or to make things better for staff, it was purely a way for them to make more money selling individual park VIP passes for the same price.

 

That's the last time I give Merlin the benefit of the doubt...

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The whole VIP thing apart from usual bonus packages like animal visits, etc, should be abolished. It just rewards greediness paying to skip queues, to have park managers' phone numbers, creates the most vile arrogant guests on park and is also totally poor value for money.

'Behind the scenes' tours when the 'front of scene' rides are so poor and left to rot is especially bad. Brand new rides is ok, but it's like the rest are just bags of money to be squeezed dry with zero care for reinvestment or proper maintenance

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18 hours ago, Coaster said:

Oh, so they weren't doing away with it to improve guest behaviour and/or to make things better for staff, it was purely a way for them to make more money selling individual park VIP passes for the same price.

 

That's the last time I give Merlin the benefit of the doubt...

Problem with the merlin VIP one was it was too cheap for what you got - I expect you’d see far fewer issues with a small number of VIP passes across the parks for the same price as you’d have paid for a VIP merlin one.

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The end goal is to make profit. This Legoland VIP pass (and the other parks to follow) enable customers to pay a higher price if they are willing to do so. 

 

Merlin operate a similar model to airlines. You have standard class (day tickets), business class (MAP holders) and first class (VIP pass). An airline makes its money from business class, standard is to fill the plane and get customers who are unwilling to pay more. While first is to extract as much money as possible from customers who can and are willing to pay more. (Its a little more complex than that but I deemed it a reasonable comparison). 

 

I don't think that the VIP pass is going to be an issue, demand won't be high and it seems like they are still restricting the number anyway. 

 

For the park to really maximise profit they should invest in complex algorithms for day tickets. Not only would it increase revenue but it would also help on distributing crowds. 

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To maximise profit they should make the parks operate in a sensible fashion, with sensible hours...

 

People who are enjoying their day spend more money... Something they can't or don't want to do when 3+ rides are dead, half the f&b places are closed and the place looks worse than Bakken!

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There’s probably a better chance of the London Resort actually opening or Hartenhoff (version 1) happening than them starting to deliver quality service to everyone.

 

The way most of the parks are run and operated would make you think they were billions in debt and trying to tackle bankruptcy, not a massive operator second behind the mouse. 

 

I didn't visit Bakken because of the things I heard about the place. Oh well. 

 

The Lego V.I.P pass does not surprise me in the slightest at Europe’s best theme park. Yes they won an award for that.

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Lego family's Kirkbi and Blackstone to buy Madame Tussauds owner Merlin: FT

 

 

(Reuters) - Britain’s Merlin Entertainments Plc (MERL.L) is to be acquired for 6 billion pounds ($7.6 billion), including debt, by a group made up of Kirkbi, the investment vehicle of Lego’s founding family, private equity firm Blackstone Group LP (BX.N) and Canadian pension fund CPPIB, the Financial Times reported on Friday. 

The deal to buy Merlin, which owns and operates Madame Tussauds waxworks exhibits around the world, is expected to be announced as soon as Friday morning, but no deal was guaranteed until the announcement, the FT said on.ft.com/2X9zLxD, citing multiple people it said were close to the matter. 

The deal is likely to value Merlin’s shares at around 460 pence, one of the people told the FT, giving it an equity value of more than 4.73 billion pounds.

 

https://uk.reuters.com/article/us-merlin-ent-m-a-consortium/lego-familys-kirkbi-and-blackstone-to-buy-merlin-entertainments-ft-idUKKCN1TS3EI

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BBC reporting Merlin have accepted a £4.8bn offer.

 

https://www.bbc.co.uk/news/business-48797245

 

Legoland and Madame Tussauds waxworks owner Merlin Entertainments has accepted a £4.8bn offer for the firm.

A group of investors, led by the Danish billionaire family which controls the separate toy firm Lego, has made the approach alongside a group of other private investors.

Kirkbi Invest says it has the money and experience to "realise the company's potential to grow".

Merlin also owns the London Eye and Alton Towers.

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For the time being very little. Blackstone are already heavily involved with Merlin Entertainments as well as other parks (Port Aventura and Busch Gardens/Sea World). The Lego family are also already involved with Merlin.

 

It should make the parks less accountable to shareholders but it would mean more accountablity to Blackstone. With any luck if the buyout goes ahead they will replace the board and get a team that actually knows what they are doing. Someone who is willing to use the overall Merlin brand to entice people as well as the sub-brands.  As well as someone who is willing to invest in higher risk projects to increase growth and profit while ensuring existing assets remain functional in the long term.

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Now we are all going to have to get used to moaning about a different owner/operator.

 

I hope this proves successful for the parks and not just the shareholders.

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21 minutes ago, planenut said:

Now we are all going to have to get used to moaning about a different owner/operator.

 

I hope this proves successful for the parks and not just the shareholders.

Same operators, just the holding company of Merlin will be different. I assume that the same management and day to day operations will be the same. From the press release they are keeping it as a seperate company, same HQ and not distributing or changing assets of merlin. 

 

Fingers crossed this helps with investment in the parks, if the parent company wants to invest more then there arent shareholders to block it based on profit. There is a full document on Merlins website about the plans. https://www.merlinentertainments.biz/recommended-offer/

 

The document also says that the two companies (Blackrock and Kirkbi) were there before public listing: 

 

"KIRKBI and Blackstone jointly controlled Merlin in the 8 years prior to the 2013 public listing, during which time Merlin became the second largest location based entertainment business globally, and the partner of choice for the world's leading brands to deliver immersive experiences to guests."

 

So fingers crossed we go back to the investment days! 

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