Investment firm Blackstone Group has sold its 21 percent stake in SeaWorld to a Chinese company.
The deal with Zhonghong Group gives SeaWorld a path into the growing Chinese tourism market and a partner with experience in theme-park development there.
Zhonghong Group will buy the stock at $23 per share, Orlando-based SeaWorld Entertainment Inc. announced Friday. The stock had closed at $17.31 Thursday and rose before Friday’s opening bell to $19.69. Zhonghong is paying a 33 percent premium on Thursday’s closing price. SeaWorld also agreed to a deal with its new, largest shareholder for licensing and consulting deals for theme-park development in China. Two Zhonghong executives will join SeaWorld’s board.
“SeaWorld’s future is brighter than it was two days ago,” said Dennis Speigel, president of the International Theme Park Services trade group. “You already have Disney in China as well as Universal; now you have SeaWorld.”
The world’s most populous country and second-largest economy has been a popular target for theme-park companies in recent years. Disneyland Shanghai opened in June and Universal is working on a park near Beijing in partnership with several state-owned companies. There are more than 100 theme-park projects in the works in China from both Chinese and foreign investors, Spiegel said.
It’s unclear whether killer whales and other marine mammals could be a part of an expansion into China. China has 39 marine mammal parks, including massive attractions such as the Chimelong Ocean Kingdom near Hong Kong, according to a Washington Post report. Speigel said animal welfare isn’t a mainstream issue yet with Chinese consumers.
“The baggage that comes with the PETA and the animal activists really hasn’t really rooted in China,” he said.
SeaWorld announced in 2016 that it would no longer take killer whales from the wild or breed orcas in captivity. A spokeswoman for the park said that policy stands.
“For any international expansion opportunities, SeaWorld’s commitments regarding orcas and orca breeding apply, regardless of location,” SeaWorld spokeswoman Aimee Jeansonne Becka said in an email.
Zhonghong’s other theme-park developments include the Monkey Kingdom theme park being built outside Beijing. Monkey Kingdom is based on a 16th-century Chinese novel “Journey to the West” and is expected to include roller coasters, boat rides and more. Hailed as a “Disney-quality” concept, Monkey Kingdom was supposed to open in 2014 on 100 acres at a cost of $1.5 billion under Zhonghong’s real estate arm.
As part of the Zhonghong deal, SeaWorld will “advise on the concept development and design of theme parks, water parks, and family entertainment centers to be developed and operated by Zhonghong Holding, including exclusive rights in China, Taiwan, Hong Kong and Macau.”
“China has invested enormously in its leisure industries in recent years and this gives Zhonghong both a partner with deep knowledge in the business and access to SeaWorld’s well-known brands,” theme-park analyst Bob Boyd of Pacific Management Group said in an email.
SeaWorld has eyed other markets outside the U.S. In December the company announced it will partner on a new theme park in the United Arab Emirates slated to open by 2022.
A SeaWorld theme park in China isn’t imminent, but the company can evaluate possibilities before making long-term commitments, Jeansonne Becka said.
Zhonghong will pay SeaWorld $3 million for the exclusive rights to develop SeaWorld theme parks in China through 2018 with another $1.5 million option for 2019 and the ability to extend the deal later, regulatory documents filed Friday show. The consulting and design agreement will pay SeaWorld another $3 million through June 2019.
Friday’s agreement contains restrictions on Zhonghong’s ability to sell its interest in SeaWorld for a period of two years. It also cannot acquire more than 24.9 percent of SeaWorld’s outstanding shares without the approval of the independent directors of SeaWorld’s board.
Following the closing, Blackstone and its affiliates will no longer hold any interests in SeaWorld or have seats on the board. Blackstone first bought SeaWorld in 2009, then took the company public in 2013.
Blackstone bought the company just a few months before an orca killed trainer Dawn Brancheau at the company’s Orlando theme park. That set in motion a chain of events that included the 2013 documentary “Blackfish,” which brought arguments against captivity into the mainstream. SeaWorld has suffered for several years now from declining attendance and revenue, and much of that has stemmed from the controversy over its orcas.
Blackstone also used to hold a stake in Universal Orlando.
SeaWorld CEO Joel Manby said in a news release, “Zhonghong Group has a strong track record of performance in the leisure and travel industries, and a solid management team with valuable experience in theme parks, family entertainment, and real estate development in Asia.”
One of SeaWorld’s two new board members is theme park and entertainment veteran Yoshikazu Maruyama, the head of Zhonghong’s American operations and a former executive at DreamWorks and Universal.
The other new board member is Yongli Wang, Zhonghong’s chief strategy officer who has held several posts in the international banking and finance industry.
karnold@orlandosentinel.com or 407-420-5664
