Speculation has emerged that Dreamworld owner Ardent Leisure is in talks to sell its US-based Main Event business to an American rival.
Discussion has remained in the market for some time about a possible divestment of the division, which would leave the company solely focused on running its theme park operations in Australia.
Private equity is also thought to be circling.
Ardent’s management threw further weight behind the possibility earlier this year when the company structured its debt in a way that made a split of the business easier to achieve.
The move also offered the firepower to bolster the performance of the business.
Any deal would require the approval of Ariadne and its backers — who include Queensland billionaire developer Kevin Seymour and chairman Gary Weiss. Ariadne controls 11.4 per cent of the company.
More than a year ago, Cerberus Capital Management and private equity firm KSL Capital Partners were tipped to be looking at the business.
Neither party is thought to be currently interested.
Ardent’s Main Event operations are frequently compared to the business of major rival Dave & Buster’s, although it is not thought to be an interested buyer.
It is understood that Ardent has had discussions with at least one group about a sale in recent times. Ardent’s business consists of the Main Event Entertainment division in the US and its Australian theme park operations after it sold off its Australian-owned bowling alleys, gyms and marinas in recent years.
Ardent’s earnings from its Dreamworld theme park on the Gold Coast have suffered after four people were killed on October 25, 2016 in an accident on its Thunder River Rapids ride, which has since shut.
Now the group will invest $50m on new rides and attractions over the next three to five years, in a bid to lure customers and return to profitability by the 2020 financial year. This comes after its theme parks business recorded a $10m annual loss, a result that dragged on its overall earnings, causing the group to plunge $69.9m into the red. However, lucrative real estate development potential exists on land adjoining the company’s Gold Coast theme park sites.
The Texas-based Main Event chain has 42 family entertainment centres in 17 states featuring billiards, bowling, arcade games, laser tag, rock climbing, mini golf and karaoke.
It has become the main earnings driver for the company, with revenue growing by 7.9 per cent to $US297.3m ($441.8m) during the 2019 financial year. Its earnings before interest, tax, depreciation and amortisation for the year were $31.9m.
Healthscope firmly in the sights of Bain
Bain Capital is closing in on its next big target struggling with too much debt – the country’s second-largest hospital operator Healthscope.
Incitec Pivot’s fertiliser price likely too high for some
Potential bidders have been given information about Incitec Pivot’s fertiliser unit, but the jury’s still out as to how much they will be prepared to pay..