Lego strikes deal to buy back Legoland, other theme parks

Madame Tussauds' owner Merlin said on Friday it had agreed to be acquired by the investment vehicle of Lego's founding family and private equity firm Blackstone Group LP in a deal valuing the company and its debt at nearly $7.6 billion.

The deal to buy Merlin Entertainments, which also operates Legoland theme parks around the world, will be one of the biggest private equity deals in Europe in recent years and comes as buyout firms are flush with record amounts of cash to invest.

"Following an unsolicited approach by a consortium of investors, and after rejecting a number of their proposals, the Merlin Independent Directors believe this offer represents an opportunity for Merlin shareholders to realise value for their investment in cash at an attractive valuation," Merlin Chairman John Sunderland said.

"We are, therefore, unanimously recommending it to our shareholders."

Merlin shares were expected to rise between 12 percent and 15 percent on Friday, traders said.

Merlin will be 50 percent owned by Kirkbi, the private investment company of Lego's Kirk Kristiansen family, and 50 percent owned by Blackstone and Canadian pension fund CPPIB.

The deal is expected to be complete in the fourth quarter of 2019.

The deal comes after activist investor ValueAct Capital last month urged Merlin, which also operates Legoland and the Alton Towers theme park in Britain, to take itself private.

In an open letter, ValueAct said at the time that the level of investment needed in the company meant it would be better off returning to private ownership.