Theme park news and notes: More InBev rumors
Thanks to Theme Park Insider reader James Rao for the tip.
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.
Thanks for the thorough explanation, Robert, but it was too late, I had already freaked out over the idea of SF Williamsburg! Ugh, nothing could be worse. Nothing.
Have fun on your trip Robert!...My take is the demerger, First Busch has many, many things going on with saving sea life, and preservation, etc...And also i belive gets grants for much of there work. And to detangle the red tape might be more then a lotta Copanies may want to get involved with..So my votes going to the spin off...And all the properties remain "Busch Entertainment"...
Nah, it will be all good for SWO and BG's. Didn't Universal Studios have this problem a few years back when moving to GE? I also do not think Six Flags will be able to afford those giant and pricy parks, but think about this: Six Flags and Disney, as far as I know, are the only other two that have had experience handling a "Zoo". I think Busch Theme Parks will more or less stay the same or go for top dollar. Though it is scary if Universal or Disney get it in FL. Talk about a monopoly!
Hawaii...you dirty rat. It's minus 12 in Ohio.
Very interesting point, Derek!
I don't know much about Merlin as I have never been to one of their parks. On the surface it looks like the company has the right stuff to take over Busch, but I just don't know. Are they clean freaks like the Busch folks are today? Will they keep the aesthetic beauty of the parks? Perhaps someone who has been to Legoland or to one of Merlin's overseas locations can comment on the company's "attention to detail" factor?
It has been said...
So negative...is all that Cedar Fair pessimism finally taking its toll, Derek? ;)
I recently bought a 2 year platinum pass to the Busch parks that includes both Busch Gardens, all 3 Sea Worlds, Sesame Place and a few of their water parks like Aquatica. It will be interesting to see if the parks aren't bought as a whole package what will happen to passholders like me.
Battle of the titans. People are afraid of Busch's future, but this excites me.
Pessimism? Cedar Fair had a great year. Business and attendance is up, parks (at least the ones in my state) look great. New B&M coaster coming to my home park this year. There isn't anything pessimistic about Cedar Fair at the moment.
My biggest fear for Busch Entertainment is that someone will buy it and then run it into the ground. Under the A-B flag, there was always plenty of back-up capital to fund improvements and rehabs. Someone going it alone won't have that cushion to fall back on. InBev is being short sighted, in that BEC is making money, has an experienced management team in place, and has parks consistently rated by users -- US! -- as some of the best in the world. It'd be a shame to lose all that. If they'd keep the parks, I might even consider drinking Budweiser or Michelob products...once in a while, anyway...
Great point, Larry. Will the new owner/owners have the capital to withstand some tough economic times? If it is Disney, Universal, Merlin, or possibly even Cedar Fair (if things are as rosy as Derek says....although even with attendance slightly up at Cedar Point - thanks to a longer than usual season and the short term phenomena of the "staycation" - per person in park spending has been down overall), then the Busch Parks should be fine. If Six Flags or some other financially strapped company takes the reigns, then what Larry forecasts will probably come to pass.
I'll tell ya...I have an absolutely horrible time at Cedar Point and Kings Island several times a year....just horrible. Haven't made it to Worlds of Fun yet to have a horrible time there :)
I have a horrible time a Worlds of Fun several visits each summer. Trust me, Derek, you wouldn't want to waste your time riding one of the longest steel coasters in the world (Mamba), or one of the better B&M inverts (Patriot), or some cut-rate GCI woodie (The Prowler). Ugh! Just awful! =D
This article has been archived and is no longer accepting comments.