Disney has bought out 9 per cent of Saudi Prince Alwaleed Bin Talal’s Kingdom Holdings share in Euro Disney SCA and has made an offer of 2 euros per share (a 67 per cent premium) for the rest.
Kingdom will retain a 1 per cent share in Euro Disney, and will be the only private investor if the rest of the shareholders accept Disney’s offer.
Under French stockmarket rules if Disney can increase its shareholding to 95 per cent (following the purchase from Kingdom Disney will have 85.7 per cent) it will have to buy the rest.
Disney set up Euro Disney to run the Disneyland Paris resort, which opened in 1992.
Euro Disney has recorded losses in 18 of its 25 financial years due to lower visitor numbers, poor market conditions and high intercompany charges for the use of Disney branding.
Disney’s charges – which totalled 75million euros in royalties and management fees on revenue of 1.28billion euros last year – have been the subject of a court case brought by Euro Disney investors who claim that the fees have been used to deliberately drive down the share price ahead of a buy back.
The move to take Euro Disney back into nearly full ownership comes after a a 1billion euro refinancing package in 2014. This follows a number of debt restructuring transactions over the years as Disney has increased its stake to bail out Euro Disney.