NBC Universal, controlled by Comcast Corp. (CMCSA), may need to pay as much as $1.55 billion to buy the 50 percent stake in two Universal Studios Florida theme parks that partner Blackstone Group LP (BX) is seeking to sell.
Analysts value the property at $2.3 billion to $3.1 billion, including the separate, gated parks, Universal Studios Florida and Universal’s Islands of Adventure, and the CityWalk dining, retail and entertainment area.
Amobi values the Universal Orlando complex at $2.3 billion to $2.5 billion, or 6 to 6.5 times Ebitda, earnings before interest, taxes, depreciation and amortization. That’s the same metric he applies to parks owned by the Walt Disney Co. (DIS), which has four gated attractions in Orlando.
Private-equity buyers might step up, Amobi said, mostly because there’s “the lack of a deep field of potential strategic buyers” beyond NBC Universal. Media companies such as DreamWorks Animation SKG Inc. (DWA) and Time Warner Inc. (TWX)’s Warner Bros. prefer higher-margin character licensing, he said.
Warner Bros., for example, granted Universal a license for “The Wizarding World of Harry Potter” attractions, and DreamWorks Animation licenses “Shrek” for a “4-D” attraction. Marvel Entertainment, which Disney acquired in 2009, licenses Spider-Man, Hulk and other characters for rides.
Blackstone gave NBC Universal until June 12 to buy its stake, according to a March 14 regulatory filing by Universal City Development Partners Ltd., the joint venture that owns the properties. Christine Anderson, a Blackstone spokeswoman, declined to comment.
Otherwise, the New York-based private-equity company will have another 270 days to sell the entire Orlando operation to a third party for at least 90 percent of what it’s seeking from its partner.
“We are studying the proposal and considering our options,” Cindy Gardner, a spokeswoman for New York-based NBC Universal, said in a statement.
Paul McGuire, a Warner Bros. spokesman, and Zenia Mucha of Disney had no immediate comment. DreamWorks Animation didn’t respond to an e-mailed request for comment.
Universal Studios in Orlando generated Ebitda of $391 million in 2010, according to the filing. It has $1.5 billion in debt and $259 million in cash.
The parks’ use of brand names and popular characters may be at risk if the company is sold.
If a buyer other than NBC Universal acquires Blackstone’s stake, “it could impact our continued use of the ‘Universal’ name and certain intellectual property” within 30 months after a change in control, according to the filing.
The agreement with Warner Bros. may terminate if the park isn’t 50-percent owned by one of the partners or if the new owner doesn’t meet “certain financial and reputation tests,” according to the filing.
Under certain conditions, a change of control would allow NBC Universal to withhold new characters from the park.
Craig Moffett, an analyst for Sanford C. Bernstein & Co. in New York, values the theme parks, including one in Los Angeles, at 8 times Ebitda, based on projected 3 percent to 4 percent growth in 2011 and 2012. The makes the Florida theme parks worth $3.1 billion and Blackstone’s stake $1.55 billion.
Philadelphia-based Comcast, the largest U.S. cable TV provider, gained majority control of NBC Universal in January from General Electric Co. (GE) by paying $6.5 billion in cash and contributing $7.25 billion in assets to a joint venture that owns the media company.
It isn’t clear Comcast wants the other half of the Florida properties, Amobi said.
“I’ve attended Comcast’s presentations and they haven’t ever made the case that the theme parks are central to their content vision for the company,” Amobi said.
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