Taking the Mickey (Mouse): Walt Disney Co. delists Euro Disney after several bailouts
by Lucy White
Walt Disney Company, the US media conglomerate, has tied up the take-private of its only European theme park after growing tensions with shareholders.
Trading in Euro Disney, the parent of Disneyland Paris, was Frozen (pun intended) yesterday as Walt Disney Co. announced the results of its tender offer and the shares were suspended from the Euronext exchange.
The US company said it had acquired a further 11.01 per cent of Euro Disney – which made a €166m loss in the six months ended March 2017 – bringing its total ownership to 97.08 per cent.
At €2 apiece, the offer valued Euro Disney's entire share capital at the princely sum of almost €1.6bn.
Walt Disney Co. began increasing its stake in February, buying around nine per cent from Saudi conglomerate Kingdom Holding Company.
It then extended the offer to all other shareholders, and will now complete a mandatory buyout on 19 June to take total control of Disneyland Paris.
The move comes as Euro Disney's relationship with its American namesake had become increasingly Tangled in recent years.
Walt Disney Co. supported a €1bn recapitalisation of Euro Disney in 2014, and in 2012 had to take over its loans from a syndicate of banks and provide new funding.
The French business was still indebted by almost €1.2bn at the end of March this year.
Yet figures emerged in December revealing that Walt Disney had charged its Parisian offspring nearly €1bn in licensing fees over the past decade.
Hedge fund CIAM, which owned a small minority stake, launched an ongoing lawsuit to challenge the fees.
Perhaps prompted by the disgruntled shareholders, Walt Disney Co. agreed to waive two years' worth of royalties and management fees at the end of last year to provide extra liquidity.
CIAM also criticised Walt Disney Co.'s latest plans to take Euro Disney private, but its deputy chief executive and managing partner, Anne-Sophie d'Andlau, has since said:
“CIAM is delighted that its campaign to highlight the inequitable relationship between Walt Disney and Euro Disney has resulted in a significant return for its investors as a result of this tender offer.
Even though Euro Disney will be delisted following the squeeze out process, CIAM will continue its legal battle at the criminal court.”
But the business itself defended the move, and said: "We believe such an operation will provide Euro Disney with a strong financial footing to continue its strategy, while providing minority shareholders the opportunity to exit at a significant premium."
Walt Disney Co. intends to support another €1.5bn recapitalisation of the debt-laden company following the take-private.