Merlin and Prestbury – Sale and Lease Back Transaction

Prestbury 1 Limited Partnership (“Prestbury”) Nick Leslau’s principle property investment vehicle, and Merlin Entertainments Group (“Merlin”), controlled by affiliates of the Blackstone Group LP, today announced that they have entered into a sale and leaseback in relation to certain of Merlin’s property assets including Madame Tussauds London, Thorpe Park, Alton Towers and Warwick Castle, for £622 million.

The properties sold to Prestbury will be leased back to Merlin on 35 year renewable leases, and Merlin will continue to operate and invest in these very important businesses exactly as before. Merlin will use the proceeds from the property sale to help fund its ambitious three year €400 million development programme, across both its existing estate and new attractions; and to repay debt incurred to fund its recent purchase of The Tussauds Group. Merlin will retain substantial freehold property ownership in the UK, Europe and the USA including the property underlying its four LEGOLAND theme parks, Gardaland and many of its SEA LIFE attractions; giving the Group real balance and flexibility going forward.

Merlin believes an SLB will leave the company able to focus on its core competency which is operating successful visitor attractions. A landlord structure is standard for most major modern retail and leisure businesses today, and a number of Merlin’s attractions already operate in this way; including in recent years new attractions such as Madame Tussauds sites in the USA, Dungeons, SEA LIFE, and only this month the first LEGOLAND Discovery Centre in Berlin. This transaction will not in any way hamper the company’s ability to operate and develop the sites concerned, on a very long term basis.

About Prestbury

Prestbury 1 LP is a discretionary fund with £475m of committed cash with substantial ownership by Prestbury Investment Holdings Limited (“PIHL”) and managed by the PIHL management team. Recent sale and leaseback deals completed by PIHL and Prestbury 1 LP include 220 pubs from Spirit Group (now Punch Taverns) for £500m, over £500m of budget hotels from Travelodge, £140m Bank of Scotland London HQ, £100 m of Southern Cross nursing homes, £85m Halifax High Street shops, £220m of Iceland stores and Booker warehouses, and the £690m Capio Hospitals portfolio.

About Merlin Entertainments

Merlin Entertainments Group is the leading name in location based, quality family entertainment. Now the world’s number two visitor attraction operator, it aims to deliver unique, memorable and rewarding experiences to its 30 million visitors worldwide, through its iconic global and local brands, and the commitment and passion of its managers and employees. Merlin has 51 attractions and 6 hotels, in 12 countries, across three continents – Europe, North America and Asia – and employs over 13,000 staff. Merlin Entertainments brings together LEGOLAND, Madame Tussauds, British Airways London Eye, SEA LIFE, Gardaland, Dungeons – as well as national brands such as Alton Towers, Thorpe Park, Warwick Castle, Heide Park and Chessington World of Adventures. All brands which are distinctive, challenging and innovative – and which have great potential for growth in the future. Growth which will be achieved through a strategy of continued development of Merlin’s existing sites; rolling out its key midway brands such as Madame Tussauds and SEA LIFE in Europe, the USA and beyond; and linking attraction concepts and hotels to create destination resorts.