Share Prices & Company Research


24 May 2019

Rollercoaster week for Merlin Entertainments

Poole-based theme park operator Merlin Entertainments has rejected an activist investor’s call to take the company private, saying its current strategy is the best one for shareholders.

US-based ValueAct Capital urged the Alton Towers owner to seek a buyer to take it private, saying its current trading price did not “reflect the underlying value of the company and may not in the foreseeable future” as analysts were concerned about the organisation’s plans to invest an increasing amount of capital in long-term projects while returns were falling.

Merlin Entertainments issued a response, saying: “The Board regularly considers all options for driving shareholder value and has concluded that it remains in the best interests of all its shareholders to continue to pursue its current strategy to create a high growth, high return, family entertainment company based upon strong brands and a global portfolio that is naturally balanced against the impact of external factors.”

Merlin’s share price was down at the start of the week, but rallied more than 7% on Thursday (23rd May 2019) following ValueAct’s announcement.

Stephen Wolstenhulme, Head of the Poole/Bournemouth office of investment management and stockbroking firm Redmayne Bentley, said: “It’s fair to say it’s been a disappointing time for Merlin Entertainments lately, with two analysts having downgraded the stock in May because they weren’t convinced of its longer-term success.
“Merlin’s investment plans are ambitious; it’s just announced the opening of a new Madame Tussauds franchise in Prague and new Legoland theme parks in New York and South Korea are planned by 2022.  ValueAct is concerned that investors will not be able to underwrite this.

“As always, investing is something to be done for the long term and patience will be needed for those hoping that the spectacular experiences that Merlin creates will translate into magical returns further down the line.”


Please note that investments and income arising from them can fall as well as rise in value and you may lose some or all of the amount you have invested. Past performance and forecasts are not reliable indicators of future results or performance. Please note that this communication is for information only and does not constitute a recommendation to buy or sell shares in Merlin Entertainments.

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Rollercoaster week for Merlin Entertainments
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