Jun 2, 2019

Merlin investors hope activist will spark a little magic

In a letter to the Merlin board last month, ValueAct, the company's second-biggest shareholder, said it was undervalued by the stock market and urged Merlin to seek a buyer to take it private. The theme park operator had "Demonstrated ability to earn high returns converting family parks into resort destinations", the letter said, but "Simply put: Merlin has struggled as a public company". Some shareholders support its view, but Mr Davies said that after the "Sugar hit" of Merlin being bought, investors would lose out. The ideal situation would be to keep Merlin public but in a "Properly valued scenario", he added. A source close to the company referred to Merlin as the "Squeezed middle" - somewhere between big theme parks such as Disneyland and new cheaper experiences such as rope walks and escape rooms.

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