Disney looks to take full ownership of Disneyland Paris
The Walt Disney Company is moving to take full financial control of the Disneyland Paris Resort.
Euro Disney S.C.A. announced today that Disney is buying out Saudi Prince Alwaleed Bin Talal's Kingdom Holding Co.'s stake in the Paris resort, which would raise Disney's ownership to 85.7 percent of the company. In addition, Disney is making a €2 a share offer for all outstanding shares of Euro Disney S.C.A., in attempt to take full ownership of the company. (Here's the offer, in French.)
If Disney can get to 95 percent ownership through this buy-out offer, it would then delist Euro Disney from Euronext Paris stock exchange and complete the process of taking the holding company private.
In 2015, Disney committed to a €1.5 billion recapitalization program for the Disneyland Paris Resort, to buy out debt and invest in capital refurbishment throughout the property. Disneyland Paris' attendance has been falling, along with tourism in the Paris area in general, following the 2015 attacks in the city and a slowing economy across much of Europe.
"Today’s announcement reflects The Walt Disney Company’s continued confidence in Disneyland Paris and in France, and will enable Euro Disney to continue improving and investing in the Resort," Disney said in a statement.
If you'd like to dove into the full details of Disneyland Paris' ownership and recent financial performance, take a look at its just-published 2016 reference document. (This one is in English.)
The Walt Disney Company does not have full ownership of any of its theme parks outside the United States. Hong Kong Disneyland and Shanghai Disneyland are jointly owned with local governments and the Tokyo Disney Resort is wholly owned by Oriental Land Co. and operated under license from Disney.
Rival Universal in 2015 paid US1.5 billion to buy a controlling stake in USJ Co., which owns Universal Studios Japan, and in 2011 bought out former partner Blackstone Group to take full ownership of Universal Orlando. That leaves Universal Studios Singapore as the only Universal park not majority-owned by Universal parent Comcast.
Six Flags and SeaWorld have announced plans for new parks in China and the United Arab Emirates, and those parks will be owned by local investors and operated under license, similar to the deals that Disney has in Tokyo and Universal has in Singapore.
It's about time for Disney to takeover the Paris sinkhole. Maybe they should consider taking over Hong Kong if it continues to take in water. Both Paris and Hong Kong (plus DCA) were leftover disasters of the Eisner era where budgets dictated park design. They didn't meet the expectations of customers and thus lagged. Hong Kong has the added complication of having the newest foreign Disney park located a mere 1000 miles away in Shanghai. Shanghai can't be blamed on Eisner so this mistake is all on Iger. The challenges will continue for many years to come.
I have been a shareholder in Eurodisney for over 15 years never making a profit and having to go through several restructerings which i have lost a lot of money.
If Disney owns it all. They they don't need to pay themselves all the fees and debt payments that the company has to spend all the profit on the moment. So it will be back in profit in no time. I'm sure Disney has a long term strategy esp now the Disneyland park and hotels are nearly back to their original glory after all the much needed refurbishment. The only issue then is the Studios = Star Wars land (cheap clones of the US original rides ) or Marvel (expensive new original rides) to provide a reason to visit and stay at the resort = more profit. As at the moment there isn't a significant draw to attract revisits as only a few new attractions in years so folks are stalling visiting. The 25th will be nice and may coax a few more visitors, let's hope they can replicate a small part of the successes of Disneylands Diamod celebration.
Big, and very interesting news. As for the anon comment, they complain that the shares are worthless, then complains that it's a low offer. It's an open market, you decide if it's worth selling
A welcome sight- now only if they'd buy up Oriental and get TDL...
They won't be able to buy up Hong Kong as it is a partnership with a Government owned company and that was part of the requirement for opening the park. It also helps them as the Goverment is definitely on their side when it comes to issues, even including IP violations which are rife in china.
>>> I have been a shareholder in Eurodisney for over 15 years never making a profit and having to go through several restructerings which i have lost a lot of money.
This can only be a good thing for the resort. Disneyland Paris has so much potential, but it needs quite a bit of work before it can fully utilize it (especially Walt Disney Studios...that park needs a DCA-style makeover), and if Disney has full ownership they may be more willing to invest in the resort. There's still time to do something big for the 30th in 2022, but they'd need to start soon.
@Chad H ... I assume you realize there are other companies you could invest in ... right?
Great move. Now they'll own all of Paris Disneyland's losses...
Disneyland Paris was a mistake from the beginning. Iger is throwing good money after bad.
>>>@Chad H ... I assume you realize there are other companies you could invest in ... right?
SMART individual share holders bailed on EuroDiney when WDCo proposed the FIRST of what are now going to be THREE financial restructurings.
Surely smart individual shareholders didn't invest in it at all... and realised that Paris was a pretty silly place to stick a theme park.
This is a bit of a surprise. Either Disney feel that the resort has continually under-performed so they want to have full control to try to turn a profit/mitigate losses or they genuinely believe in it's longevity. The problem with the resort is that it is in France. Pure and simple! Whether it was Government subsidy or homage to Walt's Franco ancestry that swayed the company's decision but it was built in the wrong place.
Disneyland Paris was Eisner's first blunder. The government of Spain offered to pay Disney large subsidies and give Disney prime real estate along the Mediterranean coast, free of charge. If Eisner had listened to Dick Nunis, that's where Disneyland Europe would have been built.
The question you have to ask is what does Disney really want from the resort?
Disneyland Paris was built as Eisner's flagship resort. Was it a mistake? An argument could be made for yes and no.
Among other reasons, DLP has failed financially because the French are just too snobbish to embrace Disney.
I've been a shareholder for the past 10 years, and at no point was I investing to make money out of it. My shares are "worth" much more than the share price.
The Big first mistake about Disneyland Paris is the location, it had been built in Spain (as it was planned in the beginning), where Port Aventura is located, nicer weather and nicer people than in Paris. Visit Disneyland Paris in Autum and Winter can ruin your experice due to bad weather
They are buying it up so that they have no one to answer to if they proceed with dissolving it.
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