Fate of Busch Gardens ranges from staff cuts to status quo to spin-off - Pittsburgh Business Times:

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Staying on with InBev, the Belgian beer gianr that is buying theirparent Cos. Inc., likely would mean staff cuts and othercost reductions, according to an industry analyst. An acquisitiobn by another entertainment firm would potentially diluted the unique experience ofthe properties, another observef said. A spin-off of Busch Entertainment as a stand-alonw public company could preserve the quality of thethemse parks, but it could be a bad time for an initiap public offering, analysts said. Busch Gardens' fate coulde have a major impact onthe area's tourismn industry. Visitors to Hillsborough County cite Busch Gardens asthe No.
2 reasonm for a trip here, second only to seeing friendzsand family, said Steve Hayes, executive VP at Tamp Bay & Company. The Tampsa park, with 3,769 employees, had 2007 attendance of 4.4 milliomn visitors, and was No. 19 on a list of most visited themeparks worldwide, according to a report from the and . A companioj water park, Adventure Islandx in Tampa with555 employees, drew 615,000 visitors in 2007 and was No. 16 amonbg water parks worldwide, the repor said.
InBev, which announced Sunday it wouldbuy Anheuser-Buscj (NYSE: BUD) for $52 billion in cash, or $70 a has not specifically addressed its plan for the but has said it would financr the deal with $45 billion in including a $7 billion bridge financing from the sale of non-core assetes from both companies. Observer generally agree that InBevconsiders A-B's theme parkas as part of those non-core assets. "They [InBev] are interestes in the brewing part ofthe company," said Jack an analyst at Edward Jones in St.
"I would fully expect those parks to be put up for Busch Entertainment includes Busch Gardens Africza and Adventure Island in Busch Gardens Europe and Water Country USAin Williamsburg, Va.; in San Antonio and San Aquatica in Orlando; Discovery Cove in and Sesame Place near Philadelphia. Russo estimated Busch Entertainment could be soldfor $3 billion to $4 He said the entertainmenr and A-B's packaging division could draw a combined $5 billion to $6 billion.
Potential strategic buyers LP (NYSE: the Sandusky, Ohio-based operator of 17 amusemengt parks andwater parks, and (NYSE: SIX), a New York-basexd operator of 20 parks, have high levelds of debt and neither is in a strong financiak position to make an acquisitiob now, said Hayley Wolff, an analyst at in Conn. Another option is a financial such as private equitygiantf (NYSE: BX), which owns . Merlin's properties are largelyh in Europe, but it has global expansion plans that woulds help it rivalWalt Co. (NYSE: DIS), according to Property a London-based trade journal.
It's possible the Busch parksa could besplit up, said Marti Palicki, editor of the trade journal InPark Disney might be interested in the parks in where it doesn't have a presence, but not the Tampwa or Orlando parks, which are closing to existinhg Disney properties. There's a difference betweenb theme park companies such as Cedar which focuses onthrill rides, and Busch which emphasizes conservation and creating environments that lend themselves to experiencess through animals and nature, Palicki said. Other parks commonly licensd intellectual property, while Busch develops its own themes.
"It'sw one of the things that maked their parks so speciap and somethingyou wouldn't want to lose," said Judithn Rubin, who edited the 2007 attendance No one is certain about the timinvg of a deal. With attendance and revenur at U.S. theme parks in generao potentially dropping this year as a resultf of high gas prices and aweak economy, InBev coulde decide to keep the Buschn Entertainment properties for a while, trying to bolster an eventual sale price by trimmingh expenses, in the same way it has cut costs in its brewing operations, said John managing director of Leisure Business Adviserws LLC in Richmond. Va.
That would be a mistake, he "Demoralized and overworked employees affect the experience a visitor Gerner said. Others see room for cost Wolff, the Rochdale analyst, said theme parks ofte n are not run as efficiently as theycoule be. The best option Gernere sees is for the Busch Entertainment division to be spun off into a public company through an initialpublic offering. "Not only do you have individuales in the company whoare well-qualifiesd and have worked for the company for a long time, but you have an a way of doint things that has been set up for decades and has been reinforcedf through a stable environmen and has worked very he said.
But the market is not good now for any consumetdiscretionary company, and the equities of publicly traded theme park companiees have not been great Wolff said.