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Financially troubled Danish toy maker LEGO® Holdings is about to sell four of
the biggest bricks in its empire — its LEGOLAND theme parks.
Danish media have speculated that Blackstone Group, a New York-based private
equity firm is close to an agreement to buy LEGO family entertainment parks.
The deal would be valued at about $461-468 million, according to sources close
to the deal cited by the Wall Street Journal on Tuesday.
The Kristiansen family, which founded the company and still controls it, is
expected to keep a 10% to 15% share of the theme park business, the report said.
Blackstone spokesman John Ford declined to comment on the reported deal and a
LEGO representative didn’t return calls.
LEGO put its four theme parks on the block earlier this year in an urgent effort
to garner some liquidity after suffering a record loss in its toy business. Last
year 2004, LEGO had a net loss of about $335 million as its toy sales declined
in the face of growing competition from China.
The company also faced heavy restructuring and write-down costs.
Blackstone, which has raised almost $6 billion for real estate investments in
North America and Europe, is not a stranger to the theme park business.
Blackstone owns a half interest in the operation of Universal Studios Orlando
and, just last month, it bought London-based Merlin Entertainments for $187
million. Merlin operates 28 tourist attractions in eight European countries
under the Dungeons, Sea Life, Seal Sanctuary and Earth Explorer brands.
The first Legoland park, located next to the company headquarters in Billund,
150 miles west of Copenhagen was opened in 1968. All four Legoland parks
together in Carlsbad, Denmark, England and Germany attract more than 5 million
visitors a year.
The parks feature massive sculptures made of the company’s signature LEGO bricks
along with such traditional theme park fare as roller coasters, water rides and
live-action performances.
Leisure industry consultant Bob Rogers of Burbank-based BRC Imagination Arts
called the pending deal “a head scratcher” because most entertainment companies
would be loath to give up the real estate that supports their intellectual
properties.
“Legoland sells Lego,” said Rogers, meaning that the parks build brand
awareness. “If they view it as just an amusement park then they may be missing a
lot of value to the company.”
LEGO is owned by Kjeld Kirk Kristiansen, grandson of the company’s founder, Ole
Kirk Christiansen. The company isn’t publicly listed but has published earning
reports since 1997.
More about http://www.blackstone.com
-end of report-
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