Hoping to turn around a struggling Euro Disney, the Walt Disney Co. announced plans Friday to buy out all other shareholders, take control and invest $1.6 billion to make improvements to the Paris resort.
The financial bailout is the second in three years for the European theme park, which has reported weak returns and sluggish attendance numbers amid terrorism fears in France.
“Today’s announcement reflects the Walt Disney Co.’s continued confidence in Disneyland Paris and in France and will enable Euro Disney to continue improving and investing in the resort,” the company said in a statement.
Disney officials declined to elaborate on improvement plans, except to say that the resort had been reporting strong attendance and spending numbers until the November 2015 terrorist attacks in Paris, which forced the park to close for four days.
“After a difficult year, the Paris tourism environment remains challenging, with the year-long state of emergency still in place,” Catherine Powell, president of Euro Disney, said Friday after releasing the company’s latest earnings report.
Under the financial plan, Disney would boost its shares of Euro Disney from 76.7% to 85.7% by buying most of the shares held by Kingdom Holding Co., a Saudi holding company lead by Prince Al-Waleed bin Talal.
In addition, Disney will make an offer in April to buy all outstanding shares of Euro Disney for $2.13 a share, with plans to control more than 95% of the shares. Under European rules, once Disney surpasses the 95% threshold, the company triggers a mandatory buyout of all shares, allowing Disney to delist the resort from Euronext Paris, the European stock market, and operate the resort as a subsidiary.
On top of that, Disney has committed to invest $1.6 billion to make improvements, reduce debt and increase liquidity at the resort.
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Arrests sparked a protest in downtown Los Angeles Thursday evening. (Marcus Yam / Los Angeles Times)
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