Theme park news and notes: More InBev rumors
Published: January 17, 2009 at 12:55 AM
A story in the Financial Times is stirring up more uncertainty about the fate of the Busch theme parks.
Bidders are lining up to participate in the sale of more than $7bn worth of assets that are being prepared to go under the auctioneer's hammer in the wake of InBev's $52bn takeover of Anheuser-Busch, the brewer of Budweiser.
Busch Entertainment, the group's theme park business, which owns SeaWorld Orlando, is expected to be one of the first business units put up for sale with a possible price of up to $4bn.
Potential bidders include Merlin Entertainments, the Blackstone-owned theme park group whose assets include Madame Tussauds and Legoland.
Possible strategic bidders include media group Walt Disney, the world's biggest operator of theme parks, and Universal Studios, which is majority-owned by the US television and film business, NBC Universal.
Six Flags, which owns 20 theme parks in the US, Mexico and Canada, is also expected to ask for the sales memorandum.
Before you freak out over the prospect of "Six Flags Williamsburg," let's break down the story and see what it really says.
First, there's no timeline for when the BEC parks will go to auction. The story says that InBev has until November before it must make a payment on the bridge loan it secured in anticipation of getting money from selling selected Busch assets, such as the theme parks.
Second, requesting a "sales memorandum" isn't the same thing as making a bid. Every competitor will request a sales memorandum. Why? Because they can contain loads of juicy information about a company that previously might have been known only to insiders, including sales, expense, profit and loss figures. You'd have to be an idiot not to request one when a competitor goes on the block, even if you have no intention of bidding for it.
Third, and here's the biggie: InBev "could also opt to spin off Busch Entertainment via a demerger if it does not achieve the price it is looking for through an outright sale" (between $2 billion - $4 billion).
What the heck is a "demerger"? In short, it means that BEC would be split from InBev, with InBev shareholders getting shares in BEC. With the $400-million Hard Rock Park failing to earn even a $35-million minimum bid in bankruptcy court, there's not much solid recent pricing information about theme parks to guide a bid for BEC. Perhaps the demerger could be the way this goes. The silver lining? Maybe the Busch family isn't out of the picture yet.
I'm off to Hawaii for a week. Look for lots of warm-weather pictures in Tuesday's "park visit" report, as well as the regular TPI updates, posted from the home state of our incoming U.S. President.