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Zhonghong buys stake in SeaWorld

ESCAPE ROUTE:Chinese firms have become a favorite of Blackstone Group, which has over the past year sold two hotel companies to investors in China for billions

AFP, BEIJING

A Chinese real-estate investment firm has announced it has become the largest shareholder in SeaWorld Entertainment Inc and intends to import the US company’s controversial theme parks into China.

Zhonghong Zhuoye Group Co (中弘卓業) said in a statement released on Friday night that it would buy a 21 percent stake in SeaWorld Entertainment, whose shows featuring killer whales have been slammed by animal rights groups.

The Chinese firm bought its stake from Blackstone Group LP at a price of US$23 per share, with the transaction expected to be worth approximately US$430 million.

The purchase, which is expected to be finalized in the second quarter of this year, will make Zhonghong the largest shareholder in SeaWorld, with the possibility of raising its stake to 24.9 percent. The deal is to provide Zhonghong with exclusive rights to develop theme parks in Taiwan, China, Hong Kong and Macau, SeaWorld said in a separate statement.

“We are delighted to engage with SeaWorld to bring this iconic, world-class family entertainment brand to China,” Zhonghong president of US operations Yoshikazu Maruyama said in the statement.

“Zhonghong Group is making a significant, long-term investment in SeaWorld, reflecting their appreciation of the strength of our brand, our potential to grow the company and a shared commitment to protect wildlife and the environment,” SeaWorld CEO Joel Manby said.

Founded in 1959, SeaWorld Entertainment is the operator of twelve parks across the US, including three amusement parks called SeaWorld dedicated to marine attractions, with killer whale and dolphin shows.

However, its reputation has been tainted by several scandals and by the fierce opposition of environmental organizations. In 2010, a killer whale grabbed the ponytail of Dawn Brancheau, a SeaWorld trainer, and dragged her underwater to her death in front of horrified onlookers at the end of a show at SeaWorld Orlando.

The whale, nicknamed “Tilly,” was involved in the death of a part-time trainer at the Sealand of the Pacific facility in Canada in 1991 and that of a man who died in 1999 after he sneaked into SeaWorld to swim with the mammals after the park closed.

CNN featured Tilly in a 2013 documentary, Blackfish, that covered those fatalities and also sought to show the impact of captivity on these giant sea creatures.

Under public pressure, SeaWorld in March last year announced it would stop breeding killer whales and would no longer keep any of them in captivity after its current generation dies.

Blackstone, the world’s biggest private equity firm, bought SeaWorld from Anheuser-Busch InBev NV for US$2.3 billion in December 2009. The firm and coinvestors put in about US$1 billion. They paid themselves US$610 million in dividends in 2011 and 2012 before taking the company public and, while SeaWorld was listed, they sold US$1.7 billion in stock.

Selling to Chinese buyers has been a popular exit route for New York-based Blackstone. The firm, led by billionaire Steve Schwarzman, an adviser to US President Donald Trump, last year sold most of Strategic Hotels & Resorts Inc to Chinese insurer Anbang Insurance Group Co (安邦保險集團) for about US$5.5 billion.

This month it completed the sale of a 25 percent stake in Hilton Worldwide Holdings Inc to China’s HNA Group Co (海航集團) for about US$6.5 billion.

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