Anheuser-Busch Buys Sea World
Sep. 29, 1989
ST. LOUIS (AP) _ Spuds MacKenzie, fun-loving party dog from Anheuser-Busch Cos. Inc., meet your new partner: Shamu, that well-known killer whale.
Anheuser-Busch announced Thursday it agreed to pay $1.1 billion for the four Sea World parks around the country plus two other theme parks from Harcourt Brace Jovanovich Inc.
''We have considered Sea World as the ideal acquisition for some period of time,'' said W. Randolph Baker, vice president and group executive for Anheuser Busch.
The deal will make the brewer the second largest theme park operator in America behind Walt Disney Co., and will help Harcourt pay off the huge debt the publishing and insurance company accumulated in thwarting a hostile takeover two years ago.
But Wall Street apparently was displeased with the deal. Harcourt stock had plunged $3.87 1/2 a share to $12.37 1/2 in early trading on the New York Stock Exchange.
Stock analysts who follow Anheuser-Busch applauded the acquisition, but said it will have very little impact on the St. Louis-based company's profits or makeup.
''This is a real drop in the beer barrel, but it's a diversification move that's going to work and that's better than one that doesn't work,'' said Julie Neiman, a St. Louis-based analyst for Stifel Nicolaus & Co. Inc.
Anheuser-Busch, the world's leading beer maker, has four core businessess: beer, food, container manufacturing and family entertainment. However, 90 precent of the company's sales come from beer and beer-related ventures.
''The Sea World acquisition will give us a broad base for future expansion,'' said Baker. He said the purchase should be completed in November.
Anheuser-Busch already operates Busch Gardens in Tampa, Fla., one of the biggest zoos in the country; a 17th century European-style park in Williamsburg, Va.; a water park in Tampa; and a futuristic children's park near Philadelphia.
The company also is planning a major theme park and resort in Spain, along the Mediterranean coast just south of Barcelona, according to Baker. It's scheduled to open in 1992 or 1993.
The popular Sea World parks, which feature performing killer whales, trained dolphins and other talented creatures from the sea, are located in San Diego; Orlando, Fla.; San Antonio, Texas; and Aurora, Ohio.
The other parks involved in the deal are Boardwalk and Baseball in Orlando and Cypress Gardens in Winter Haven, Fla. The purchase also includes land adjacent to the three Florida parks, the Sea World of Texas and the Orlando airport.
Overall attendance at the parks was 14.5 million last year.
Analysts say Harcourt Brace Jovanovich, a leading textbook publisher, is selling the parks in an effort to pay off a nearly $2.9 billion debt it accumulated when the Orlando-based company fended off a 1987 hostile takeover attempt by British communications mogul Robert Maxwell.
''They (Harcourt Brace) didn't have a whole lot of choice,'' said Robert Dunlap Jr., analyst for Brown Brothers Harriman in New York.
But in giving up the theme park business, Harcourt Brace also is relieving itself of chronic management problems and falling attendance at the six parks.
In 1988, sales at the parks totaled $388 million and pre-tax earnings were $62 million. This year pre-tax earnings were projected to rise to $90 million, analysts said.
Only two bidders for the park actually went public with their plans. One was a group of former Harcourt Brace and Sea World executives led by Sea World founder George Millay. The other was Florida Leisure Acquisition Corp., which owns the Silver Springs attraction in Ocala.
Harcourt Brace has been in the theme park business for 13 years.
The purchase price of $1.1 billion includes $975 for the theme parks and the rest for the Harcourt Brace's land holdings. The agreement also calls for Harcourt Brace to receive half of the profits over $100 million from any sale of this land.