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Disney looks to take full ownership of Disneyland Paris

February 10, 2017, 11:38 AM · 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.

Replies (24)

February 10, 2017 at 12:47 PM · 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.
February 10, 2017 at 12:48 PM · 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.
I feel that disney offering 2 euros a share is a discracefull offer to buy the remaing shares at rock bottom prices.
February 10, 2017 at 1:17 PM · 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.
February 10, 2017 at 1:57 PM · 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
February 10, 2017 at 2:06 PM ·
February 10, 2017 at 2:30 PM · A welcome sight- now only if they'd buy up Oriental and get TDL...
February 10, 2017 at 2:56 PM · 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.

TO the person who criticised the Paris and Hong kong parks, you must have been to different parks than the ones i went to.

Hong Kong when i went (9 years ago) was tiny but amazingly themed and a really nice place to be. It didn't feel like it was big wide concrete paths and there were area's to wander and explore. I also love the feel of Disneyland Paris, again, area's like the pirates play area and the Casey Jones/story book boat ride are lovely and relaxed corners of the world with side paths to explore. Alice's maze is great fun and Space mountain is a great ride.

Disney studios (or what ever it's currently called) is a bit flat but ratatouille and the surrounding area is great. The biggest issue with DLP is the people. Although they were slightly improved last year, customer service is no where near there level of customer service at the US parks. Plus our cousins in mainland Europe really struggle with the concept of queuing.

February 10, 2017 at 3:01 PM · >>> 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.
I feel that disney offering 2 euros a share is a discracefull offer to buy the remaing shares at rock bottom prices.

Well, in real terms, what are those shares actually worth? You paid your money and took your chances.

February 10, 2017 at 6:47 PM · 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.

As for buying shares, I'd definitely consider €2 a fair price. While the shares were worth €4-6 several years ago, they've only been worth about €1.20 for the past couple years.

February 10, 2017 at 7:57 PM · @Chad H ... I assume you realize there are other companies you could invest in ... right?
February 10, 2017 at 11:20 PM · Great move. Now they'll own all of Paris Disneyland's losses...
February 10, 2017 at 11:50 PM · Disneyland Paris was a mistake from the beginning. Iger is throwing good money after bad.
February 10, 2017 at 11:53 PM · #ThanksParis LOL
February 11, 2017 at 8:56 AM · >>>@Chad H ... I assume you realize there are other companies you could invest in ... right?

I don't think you understood my comment. I'm not a Eurodisney investor, I was replying to one.

February 11, 2017 at 2:14 PM · SMART individual share holders bailed on EuroDiney when WDCo proposed the FIRST of what are now going to be THREE financial restructurings.
February 11, 2017 at 5:37 PM · 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.

Meanwhile, down at Port Adventura...

February 12, 2017 at 7:37 AM · 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.

The French people are not as naturally courteous as our American cousins, they will never be Disneyfied no matter how hard the Disney University try, they will refuse to speak English wherever possible, they do not embrace "Disney" as a concept/product in the way it has been in North America and South East Asia and the location in northern France has very unstable weather. Going to any Disney park in the cold and rain or overcast and windy is not the most pleasant of experiences but in Florida and California they are the very exception to the rule. Not in Paris.

I cannot agree that it was a legacy of the Eisner era as the resort is superb, especially Disneyland Park. The Studios Park does need expanding and there are far too many average on-property hotels. But the imagination and creativity and overall wonderment of the resort, especially Disneyland, is pure Disney.

I hope that with Disney's goal of sole ownership it will ultimately achieve the success its creativity deserves but they must find ways of diluting the fundamental issues which will remain a constant. However, Paris will never replicate the American experience because of the above. C'est la vie!

February 12, 2017 at 9:04 AM · 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.

With Spanish government subsidies, warm weather and proximity to Spanish beaches, Disneyland Spain could have been a massive success. But Eisner insisted on Paris, even though most of the French people and the French government did not want Disneyland in their country.

Disney's worst blunders have been committed by CEO's refusing to listen to the Theme Park Operations department: Disneyland Paris, Disneyland Hong Kong, Disneyland Shanghai and NextGen/MyMagic+/Magic Bands are all fiascos that could have been avoided if Disney CEO's had shown a little more humility.

Hubris - from ancient Greek, literally means "to stop listening".

February 12, 2017 at 3:14 PM · The question you have to ask is what does Disney really want from the resort?

Do they want to clear up its finances and begin to invest to bring it in line in terms of quality with the US resorts?

My guess would be they still see it as a valuable tool to get families hooked enough on the parks they then head over to Florida.

February 12, 2017 at 9:33 PM · Disneyland Paris was built as Eisner's flagship resort. Was it a mistake? An argument could be made for yes and no.

EVERYONE forgets that this park has been profitable from 'Day One' except the minute you take gross park profit and subject it to financing and royalty costs, and they pay WDCo more than one type of royalty, the massive losses appear.

WDCo taking full ownership will immediately allow for net profits and as WDCo has announced an additional $1 BILLION in capital spending beyond the current $1 BILLION for park and hotel restoration/pulsing. Also, an additional $600 MILLION will be spent on other expenses.

All WDCo shareholders will welcome this buyout as DIS stock analysts are reporting it as the WDCo turning a 25 year negative into a positive.

The question being discussed by Team Paris is if the parks should close during harsh winter months. It's an idea worth discussing!

February 12, 2017 at 11:42 PM · Among other reasons, DLP has failed financially because the French are just too snobbish to embrace Disney.

Completely unlike us French Canadians!

February 13, 2017 at 6:12 AM · 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 reason I bought in was the Shareholders Club. A one off payment of roughly €100 got me discounts of 10-15% off meals, merchandise, park tickets, hotels etc for 10 years and counting. At this point, I've made my money back several times over.

That being said, I'm both happy and sad about this news. Happy that Paris might get some good investment and might sort out some of the problems (i'm looking at you WDS). The sadness is because it's going to cost me that much more to visit DLP once my discounts disappear!

February 13, 2017 at 8:49 AM · 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
February 15, 2017 at 8:12 PM · They are buying it up so that they have no one to answer to if they proceed with dissolving it.

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