DXB Entertainments (DXBE), the operator of Dubai Parks and Resorts, will appoint advisors to assess an offer by its majority shareholder, Meraas Leisure and Entertainment, to take the company private.
In a statement to the Dubai Financial Markets, where its shares trade, the company’s board approved the appointment of Netherlands-based professional services company KPMG and Dubai-based asset management and investment banking partner Shuaa Capital as financial advisors and of Allen & Overy, based in London, as legal adviser on the offer.
Meraas Leisure and Entertainment and its parent Meraas Holding have a 52.29 percent stake in the company. Earlier, Meraas had offered to acquire the company’s debt worth $1.16 billion and to convert a $1.48 billion bond in exchange for newly issued company shares. This will raise its ownership to 93.92 percent. Following this, it proposes to buy minority shareholders out and take the company private.
“The proposed transaction intends to provide DXBE with a sustainable capital structure, by reducing debt, amidst a challenging market environment,” Meraas, the majority shareholder of DXB Entertainments, said.
Under the terms of the proposed offer, the shareholders of DXBE will be entitled to receive $0.0218 in cash for each share held by participating in the tender offer, which is scheduled to be launched in January 2021, subject to certain conditions.
For the first nine months of this year, DXB Entertainments announced a loss of $64 billion and its cumulative accumulated losses as of September 30 reached more than $1 billion.
Dubai Parks and Resorts, which opened in October 2016, comprises three separate theme parks including Legoland Dubai, Bollywood Parks Dubai and a Motiongate theme park. The company was forced to suspend operations for several months this year as a result of the coronavirus pandemic.
The company reached an agreement with banks in April to defer a “significant proportion” of the interest on a syndicated loan to improve liquidity amid the disruption to its operations.