Blackstone looking to sell Universal Orlando stake
Blackstone Group, the massive private equity firm that co-owns the Universal Orlando Resort, is looking to sell its stake.
Blackstone's a major player in the theme park business. In addition to its stake in Universal Orlando, it owns SeaWorld Parks & Entertainment and co-owns Merlin Entertainments, the owner of the Legoland theme parks. As such, it owns or co-owns every major non-Disney theme park in Central Florida.
Blackstone acquired its stake in Universal Orlando when it obtained the Rank Organisation, the original partner with MCA (the former owner of Universal Studios) in what was then just the Universal Studios Florida theme park and a bunch of surrounding land.
According to an SEC filing, Blackstone has offered to sell its share to fellow co-owner NBCUniversal, which would then own all of the resort.
NBCUniversal has until June 12 to agree to the deal. What if it doesn't? This is where things get interesting. In that case, Blackstone has the right to solicit bids for the entire resort, which could transfer its ownership - and NBCUniveral's - to another company, according to a "drag-along provision" in their agreement:
UCDP [Universal City Development Partners - the holding company that controls Universal Orlando - Ed.] was informed on March 9, 2011 that Blackstone triggered the right of first refusal and offered to sell its interest in UCDP to the NBCU Parties, who have until June 12, 2011 to accept Blackstone’s offer or be subject to the drag-along provisions in the partners’ agreement. We will cooperate to facilitate a sale pursuant to the terms of the partners’ agreement, including bearing the transaction costs of any such sale, but any decision regarding the timing and terms of a sale is outside of our control. Accordingly, although Blackstone has triggered the right of first refusal, we cannot make assurances that a sale of Blackstone’s or NBCU’s ownership interest in UCDP will occur or, if it does, the timing, terms or impact on UCDP of any such sale.
By the way, did you ever wonder what the ownership of Universal Orlando Resort looked like? Well, here it is, in convenient chart form. :^p
The details of the SEC filing also reveal lots of information about what happens to branding agreements within the park, including the Universal name, should the resort be sold to a third party. (Basically, many go away eventually, and Warner Bros can pull the Harry Potter license upon a sale if it doesn't like the new owner.)
Finally, props to Universal for name-checking Theme Park Insider in the filing. That's gotta be a first.
Have at it in the comments, folks.
Wow... they love Theme Park Insider. How cool is that!?!
I think this is an aggressive business move by Blackstone. NBCUniversal has a new majority owner (Comcast). UOR is more valuable that it's ever been, thanks to Harry Potter. Blackstone's got the SeaWorld and Busch Gardens parks now, with Legoland coming online soon.
Yep, and it's probably for the best. Without the competition offered by Universal, I can't even begin to imagine how lackadaisical Disney would become.
Think about this. Sea world p&e announced it would be restructuring debt. What better way to restructure than to get cash on hand. Its a move universal has to make otherwise it risks losing all right and licensing. You think WB won't use that as a reason to ask for more money for Potter? Its also a smart move for Comcast who has openly said they would like to dump the parks. With the entire control of the Parks it would make it easier to sell.
hope this doesn't mean the end of the orlando flexticket if they will be no longer connected to seaworld
Business Week adds another wrinkle: (Moody’s Investors Service said today in a report): "Director Steven Spielberg has a consulting agreement that entitles him to a portion of the parks’ revenue ... Spielberg may have the right to sell the consulting agreement to a third-party buyer, Moody’s said. Starting in June 2017, Spielberg has the right to terminate the consulting agreement and receive a one-time payment for its value or an ownership interest in the parks, Moody’s said."
And by the way, can we take up a TPI collection to buy Blackstone's share of UO? I got a saw-buck that I'll toss into the hat.
Count me in for $20..
Okay with Brian and me that's $40. Minus Spielberg's 10% and J.K. Rowling's 15% (off the gross) that's a net of $30 for Blackstone.
I can't figure out why they need Spielberg's involvement. There aren't a lot of his attractions in the park.
As has already been quoted : competition is key. Without it Disney might not have the incentive to move forward as quickly as it should.
Does anyone really think Universal "competes" with Disney? I mean in that classic "McDonald's vs. Burger King" consumer choice context?
If it gets to the third party sale of course Disney will be intrested. Then Disney will get to look at the books. It nice when you know what your competition is doing.
I may be wrong, but GE and Comcast are publicly traded companies, which means all Disney would need to do would be to buy a single share of stock which would give them the means to "get a look at the books."
Disney would most likely run into anti trust problems if they would buy the park. They would also have a hard time to make sure negative expiriences with Universal parks dont spillover to the Disney brand. Universal isnt quite like Disney, the staff isnt as smilie face as Disneys (which i pesonally like, but many Disney fans wont), older attractions are not as well maintained (which i personally hate). Bad maintenance is typical for short term cash flow obsessed PE, things can only get better once Blackstone is out.
Blackstone's investment in Universal Orlando is nearly 11 years old -- very long for P/E investments. So they are exiting to pay back investors. Has nothing to do with Sea World since that was bought by later funds (P/E firms are always raising new funds when they can that have relatively short lives).
Anonymous: Disney already sees the books through the Marvel license. And you need a lot more than one share to see the books.
If that were true, every company would own one share of everyone else! Unless you own a majority of the company and are running it, you can read the 10-K on the SEC web site like everyone else. It just doesn't work that way. Disney can find out more about Universal at a locals bar than they could be owning one share of stock.
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