The Blackstone Group: Merlin Entertainment Case Solution

The Blackstone Group conducted a roll-up of the theme parks and attractions business in Europe. It is considered that the way to generate cash for investors. Blackstone entered the business of theme parks and attractions in Europe through the acquisition of a majority stake in the UK company Merlin Entertainment in 2005. In 2005 and 2006, Merlin Entertainment acquired two other similar companies, based in Denmark, LEGOLAND based Gardaland in Italy. In late 2006, the Blackstone team weighed his options for generating liquidity for their investors. The choices were to carry out a recapitalization of a dividend or acquisition of Merlin Entertainment Group Tussauds. The acquisition, if successful, could lead to the second major theme parks and attractions business in the world after Disney. The Tussauds Group was owned by another private equity firm, Dubai International Capital (DIC). The aim of Blackstone was to make a minimum of 3 times the original investment by Merlin dividend recapitalization at least 5 times the acquisition Tussauds. A third option has emerged as Blackstone was in talks with DIC. It was an opportunity to make a sale and leaseback of real estate assets held by Merlin and Tussauds underlying. Based on the facts and financial services, it is clear that there was a compromise between the size of the potential returns of each option, the calendar and the risks that must be managed. What the Blackstone team should do?
Nabil N. El-Hage,
Brenda Chia
Source: Harvard Business School
13 pages.
Release: July 24, 2009. Prod #: 210014-PDF-ENG
The Blackstone Group: Merlin Entertainment Solution Case

The Blackstone Group: Merlin Entertainment Case Solution
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