May 23, 2019 / 4:56 AM / a month ago

Activist investor urges Madame Tussauds-owner Merlin to go private - FT

May 23 (Reuters) - Activist investor ValueAct has urged Merlin Entertainments, the owner of Madame Tussauds, the London Eye, Alton Towers, to go private, the Financial Times reported on Thursday.

In an open letter to Merlin Chairman John Sunderland, ValueAct said the company could attract a bid of about 4 pounds a share, according to the FT report here

That would value the Legoland owner at more than 4 billion pounds ($5.06 billion). It had a market capitalisation of 3.42 billion pounds as of Wednesday’s close, according to Refinitiv Eikon data.

Merlin and ValueAct, its second-largest shareholder with a 5.34% stake, according to Refinitiv Eikon data, did not immediately respond to Reuters’ request for comment.

Merlin, the world’s second-biggest visitor attractions group behind Walt Disney, struggled with rising labour costs and underperformance at Legoland parks last year which hit its stock price.

But it still guided to a “positive outlook” for 2019 and its shares have risen 4.5% so far this year.

Merlin’s current trading price “does not reflect the underlying value of the company and may not in the foreseeable future,” ValueAct said in its letter, according to FT. ($1 = 0.7909 pounds) (Reporting by Shashwat Awasthi, additional reporting by Justin George Varghese in Bengaluru; editing by Gopakumar Warrier)

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