Activist shareholder ValueAct on Thursday requested Merlin Entertainments to go personal and stated the proprietor of Madame Tussauds, the London Eye, and Alton Towers might be valued at about 4 kilos a share, 20% greater than its present worth.
That might worth the Legoland proprietor at greater than 4 billion kilos ($5.06 billion). It had a market capitalization of three.42 billion kilos as of Wednesday’s shut, in line with Refinitiv Eikon information.
“We imagine the runway for constructing accommodations, second gates, and Legoland parks is strong, and the corporate is uniquely positioned as a worldwide accomplice for mental property house owners,” the San Francisco-based mostly investor stated.
Merlin didn’t instantly reply to Reuters’ request for remark.
“Whereas Merlin thrived as a personal firm, it might have come public too shortly,” mentioned ValueAct, its second-largest shareholder with a 9.three% stake, in an open letter to the board.
“Merlin isn’t a foul enterprise. However we do suppose it’s overvalued,” HSBC analysts had mentioned on Monday when it slapped the inventory’s ranking with a double downgrade.
Merlin, which is the world’s second-largest customer sights group behind Walt Disney, struggled with rising labor prices and underperformance at Legoland parks final yr which hit its inventory value.
Nevertheless, it nonetheless guided to an “optimistic outlook” for 2019, and its shares have risen 4.5% thus far this yr.
Although ValueAct confused that Merlin’s present buying and selling value didn’t replicate its underlying worth, it backed the corporate’s administration, saying they’d want the appropriate lengthy-time period focus which might assist ship sustainable shareholder returns.