Merlin Entertainments today responded to a leading investor’s call for the company to be taken private after recent sharp share price falls.

US firm ValueAct Capital, which holds 9.3% of the theme park operator, today recommended that the London stock exchange-listed company “evaluates a public to private transaction”.

It added: ”While Merlin obviously thrived as a private company, it may have come public too quickly, with too many investments left to make for a yield-focused market.

“Private ownership is simply better placed than current public shareholders to underwrite the investments Merlin must make, and to align employee incentives appropriately.

“Years of continued share price under performance can be demoralising and destabilising for employees.

“While Merlin appears to have both a great culture and long-tenured management, this cannot be taken for granted.”

Merlin responded by confirming it as has had recent discussions with ValueAct Capital, “including their perspectives on the options for the company, and intends to continue the constructive dialogue that it has had to date”.

The company added: “The board regularly considers all options for driving shareholder value and has concluded that it remains in the best interests of all its shareholders to continue to pursue its current strategy to create a high growth, high return, family entertainment company based upon strong brands and a global portfolio that is naturally balanced against the impact of external factors.

“As announced on 3 May 2019 in the trading update at the time of Merlin’s annual general meeting, trading during this seasonally quiet period of the year has been in line with management expectations and consistent with the guidance provided on 28 February 2019.

“Merlin has also made good strategic progress in the financial year with seven Midway attractions opened and 244 additional accommodation rooms opened. In addition, Merlin has completed the sale of its ski resort businesses.

“The board remains fully confident in the ongoing execution of Merlin’s strategy and that its successful delivery will create significant value for shareholders.”

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