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Blackstone Group agrees to buy wax museum operator

Blackstone Group LP agreed to buy Tussauds Group, owner of London's Madame Tussauds waxworks museum, for ?1 billion (US$1.9 billion) to create the world's second-biggest operator of tourist attractions.

Blackstone's Merlin Entertainments Group will acquire Tussauds from Dubai International Capital LLC, a government-backed buyout firm that acquired the waxworks two years ago, the company said in a statement on Monday. Dubai will receive a 20 percent stake in the combined business.

The takeover combines Blackstone's London Dungeon and Legoland theme parks with Tussauds' waxworks and London Eye ferris wheel to create the world's biggest theme park operator by visitor numbers after Walt Disney Co, owner of Disneyland. Tussauds draws 14 million visitors a year to its sites.

"It's a great fit for them," said Dennis Speigel, President of International Theme Park Services Inc, a consultant based in Cincinnati. "It puts them in a very strategic position, not only internationally but certainly within Europe."

Based in Chessington, southern England, Tussauds runs British theme parks such as Alton Towers and Chessington World of Adventures. The company plans to open Tussauds Waxworks, famous for their models of celebrities including David Beckham and Brad Pitt, in Washington this year and Hollywood in 2008.

"It'll allow us to become a major European force and compete on the world stage like the really big American companies such as Disney and Universal," Merlin Chief Executive Officer Nick Varney said on a conference call with reporters.

Dubai is selling two years after it bought Tussauds for ?800 million from London-based buyout firm Charterhouse Capital Partners LLP. In November 2005, the fund bought control of the British Airways London Eye, Britain's most-popular paying tourist attraction.

Tussauds CEO Peter Phillipson said a combination of the two companies would work because of their geographical fit. Tussauds operates primarily in the UK, while Merlin has a presence in continental Europe.

Merlin will add more Legoland destinations, including an indoor center in Berlin, and plans to open more resorts with hotels attached.

The two companies still plan an initial public offering "at some point" Varney said. "It's part of a long-term aspiration," he said.

New York-based Blackstone set a record last month with its US$39 billion takeover of real estate developer Equity Office Properties, the biggest-ever buyout.

Blackstone bought Merlin for ?102.5 million in May 2005, giving it control of the London dungeon as well as the Sea Life and Earth Explorer amusement parks.

Three months later, it bought Lego A/S's Legoland theme parks for 375 million euros (US$492 million), beating a rival offer from Dubai International. In October last year, the company added Gardaland, Italy's biggest theme-park operator.
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