Euro Disney Says Stock Offering Is 80% Subscribed
The struggling Euro Disneyland amusement park reported Wednesday that a recent offering to raise $1.1 billion has been 80% subscribed by the public and the parent company Walt Disney Co.
“Given the current market conditions and the timing of the rights issue, the company is pleased with the level of subscription and the confidence expressed by its shareholders,” Euro Disney SCA said in a brief statement.
Since opening in April, 1992, the theme park has been troubled by recession in Europe, lesser-than-expected attendance--forcing cuts in admission prices--unfilled hotels and poor souvenir sales.
In one of the biggest capital-raising operations ever seen on the Paris stock exchange, Euro Disney has created nearly 600 million new shares at $1.88 each.
The issue allowed existing shareholders, including the Walt Disney Co., which has a 49% original stake, to subscribe to seven new shares for every two held.
But the operation resulted in a massive dilution of the previously existing 170 million shares and cut Euro Disney’s market share price to one-third the price before the issue.
A creditor-bank syndicate led by French banks is underwriting the issue and presumably would take up the remaining 20%.
However, Saudi Prince Al-Waleed bin Talal bin Abdulaziz, a nephew of King Fahd, in June agreed to act as a backup underwriter by buying unsubscribed shares.
At the time, Euro Disney said that the prince would acquire up to a 24% stake. Euro Disney late Wednesday declined to say what stake the prince may now hold.
Under the deal, Prince Al-Waleed will finance the construction of a convention center at the theme park, just east of Paris.
Officials from the lead underwriting banks were not immediately available for comment.