DXB Entertainments hires advisers to weigh up bid from Meraas

KPMG and Shuaa Capital will act as financial advisers and Allen and Overy as legal adviser, the company says

DXB Entertainments, operator of Dubai Parks and Resorts, is planning to hire advisers to evaluate the state-owned Meraas Leisure and Entertainment offer to acquire its debt and take it private. Courtesy Dubai Parks and Resorts.
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DXB Entertainments (DXBE), the operator of Dubai Parks and Resorts, will hire advisers to evaluate an offer to take the company private from its majority shareholder, Meraas Leisure and Entertainment.

The company's board on Wednesday approved the appointment of KPMG and Shuaa Capital as financial advisers and Allen & Overy as legal adviser on the deal, it said in a statement to the Dubai Financial Market, where its shares trade.

Meraas Leisure and Entertainment and its parent Meraas Holding have a 52.29 per cent stake in the company.

Last week, Meraas offered to acquire the company's debt worth Dh4.26 billion ($1.16bn) and to convert a $1.48bn bond in return for newly issued shares in the business. This would increase its ownership to 93.92 per cent. Following this, it is proposing to buy out minority shareholders 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, DXBE’s shareholders will be entitled to receive Dh0.08 in cash for each share held through participation in a tender offer which, subject to certain conditions, is expected to be launched in January 2021.

DXB Entertainments posted a loss of Dh1.06bn for the first nine months of this year and its total accumulated losses reached more than Dh6.2bn as of September 30.

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 Dh4.2bn syndicated loan to improve liquidity amid the disruption to its operations.