Wesray Emerges as Potential Buyer of HBJ Sea Worlds
Wesray Capital Corp., a New Jersey investment firm active in leveraged buyouts, has emerged as one of at least four companies interested in buying the four Sea Worlds and two other theme parks from parent Harcourt Brace Jovanovich, sources close to the sale said Tuesday.
A purchase of the HBJ properties would not be the first foray into theme parks by Wesray, a Morristown, N.J., firm co-founded by former Treasury Secretary William E. Simon. Wesray provided financing for a $610-million leveraged buyout of Six Flags Corp. in 1987, acquiring an 80% interest in the chain. Simon left Wesray in 1985 to start his own investment firm.
Six Flags, based in Arlington, Tex., operates seven theme parks, including Magic Mountain near Valencia. Six Flags President Larry Cochran said Tuesday that he recently visited the Sea World parks as an adviser for Wesray, but said he doubted that Six Flags would manage the Sea Worlds if Wesray bought the chain.
Management Issue Unclear
“I walked through the parks and gave (Wesray) my visual observations, but the people who would be doing the deal would be Wesray,” Cochran said.
It was not clear Tuesday just who would manage the Sea Worlds and other theme parks if Wesray’s bid were successful. Wesray principal Keith Hightower, said to be heading Wesray’s bid for the HBJ parks along with Burke Ross, did not return several telephone calls Tuesday.
When HBJ announced that its parks were for sale, the company said its president, Robert Caulo, was “prepared to leave Harcourt to manage the businesses under new ownership.”
Robert Evanson, chairman of HBJ’s theme parks group, declined to comment Tuesday on the identities of prospective bidders. He said HBJ is on schedule with its goal of selecting a buyer before the end of September.
HBJ, based in Orlando, Fla., announced in June that it is selling the parks to reduce debt raised in 1987 to fend off a hostile takeover attempt by British Publisher Robert Maxwell. It did not disclose its asking price for the six parks and 1,200 acres of undeveloped land, but analysts have predicted that the properties will fetch between $1 billion and $1.5 billion.
HBJ is selling its Sea Worlds in San Diego, Orlando, San Antonio, Tex., and Cleveland, as well as Boardwalk & Baseball in Haines City, Fla., and Cypress Gardens in Winter Haven, Fla. Most of the 1,200 acres is valuable land located near the Orlando airport.
Sources said that other potential buyers include Anheuser-Busch, MCA Inc. and a group led by Sea World’s founder, George Millay, and former executives Robert Hillebrecht and Jan Schultz. Each group is inspecting the parks and performing “due diligence” before making final bids, according to sources.
The Millay group has acknowledged its interest in the parks, while Anheuser-Busch declined to comment last week. MCA Vice President Michael Samuel was not available for comment Tuesday.
Fending Off Bad Publicity
Word of Wesray’s interest in the parks came as HBJ was trying to fend off adverse publicity generated by the death Monday of Kandu, a performing killer whale at Sea World. The 14-year-old whale bled to death in a pool after an altercation with another whale, before thousands of park visitors.
Analysts and HBJ officials downplayed the financial impact of the death and its effect on the sale of the parks, pointing out that Sea World has 16 other whales, including five calves born in captivity over the past two years. Kandu, valued at about $1 million, was not insured, however.
As an isolated incident, Kandu’s death “is not a big deal,” said Bert Boksen, chief investment officer at Raymond, James & Associates investment firm in St. Petersburg, Fla., who follows HBJ stock.
“The thing you want to watch is whether everyone gets hysterical, in terms of Greenpeace, the environmentalists,” Boksen said. “If they start picketing, if you see negative publicity, that creates a bad sense on the part of the public that Sea World is cruel or inhumane,” which in turn could lead to a drop in park attendance, Boksen said.
Attendance at the San Diego Sea World on Tuesday was described as normal for this time of year, the park’s peak season.
