Dubai theme park operator urges shareholders to back takeover offer

Dubai-based DXB Entertainments, operator of Dubai Parks and Resorts, is urging shareholders to accept an offer from its majority shareholder, state-controlled Meraas Holding, to acquire its debt and take it private.

Advising that the offer from Meraas - which already owns over half of the theme park group - is the “only viable route” for shareholders to recover value from their investment, on Wednesday DXB Entertainments recommended its acceptance.

In a filing to the Dubai Financial Market, the company said it has reviewed the independent expert advice received from financial advisors KPMG, Shuaa Capital and Allen & Overy in relation to the conditional cash offer received from Meraas Leisure and Entertainment.

In late December, Meraas offered to acquire debt worth AED4.26 billion (US$1.16 billion) and convert it into new DXB Entertainments shares, boosting its ownership to more than 90%.

Founded in 2007, and listed to capitalise on Dubai’s booming tourism sector in 2014, DXB it has struggled to hit targets for visitor numbers. Its troubles were increased by lockdowns put in place to combat the Coronavirus pandemic during 2020.

Having not posted a profit since listing, in November last year the company advised that its accumulated losses (as of the end of September 2020) stood at 78% of capital.

In Wednesday’s statement, DXB's board said in view of the company’s current cash position and liabilities, and near term general economic conditions, the terms of the offer were "fair and reasonable".

It unanimously recommended to shareholders to accept the offer, attend the general assembly meeting on 9th March and vote in favour of the resolutions required to implement it.

The statement noted “in the absence of any further support from shareholders, including Meraas, the current available liquidity of the company is likely to be exhausted during Q2.”

The board added that it believes that the offer safeguards the interests of the company and is the "only viable route" for shareholders to recover value from their investment.

Meraas currently holds a 52% stake in DXB Entertainments, which still counts Qatar’s sovereign fund and Kuwait Investment Authority as other shareholders.

The Dubai-based privately held holding company has projects in many sectors, majoring in attractions, entertainment, hospitality and retail in Dubai. Its entertainment portfolio includes the Coca-Cola Arena, Laguna Waterpark, The Green Planet, Dubai Safari, Hub Zero, Hawa Hawa, Mattel Play! Town, Splash Pad, and Ain Dubai, the world’s tallest observation wheel.

Images: The new Wheel of Stars at the relaunched Bollywood Parks Dubai (top) and the entrance to Dubai's Motiongate (below). Credit: DXB Entertainments/Dubai Parks and Resorts.