Rank launches theme park war

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The Independent Online

Popeye and Spiderman are to go into battle with Mickey Mouse and Pluto in the battle of the Florida theme parks.

Battle lines were drawn yesterday when Rank Organisation, the British leisure group whose interests stretch from bingo to Butlins holiday camps, announced that it is to invest pounds 270m in developing its second theme park in Orlando.

The deal is a joint venture with MCA, the US entertainment group.

Rank and MCA have already combined to open one centre in Florida called Universal Studios Florida, which was completed five years ago.

The new attraction, scheduled to open in 1999, will be called Universal's Islands of Adventure.

Rank and MCA are calling the combined centre Universal City, and plan to turn the joint attractions into a genuine rival to Disneyworld.

Rank said yesterday: "In addition to the main park, Disneyworld has the Epcot Centre and Pleasure Island, which enables it to promote itself as a destination centre and sell four- or five-day tickets. With Universal City, we will be able to do the same thing."

Rank first announced it was to build a second centre two years ago but only yesterday did it confirm the level of investment or the attractions that will form the park's core.

Universal Islands of Adventure will feature five themed islands based on well-known films and cartoon characters.

These will include Jurassic Park and Popeye together with his fellow "Sweethaven" residents and wife Olive Oil, an island based on the Marvel comic characters such as Spiderman and another called "Seuss Landing", based on the popular children's books characters of Dr Seuss.

All will have rides, restaurants and shops. Stephen Spielberg will continue to act as a creative consultant and MCA will manage the centre.

Other attractions will include a 12-acre entertainment areas with themed restaurants, nightclubs and a 16-screen cinema. Hotels, a water-based recreation complex and an 18-hole golf course are also planned.

Rank is funding the investment from the pounds 620m it realised in February when it reduced its stake in the Rank Xerox photocopier group from 49 to 29 per cent.

The total cost of the new theme park is estimated at $2bn.

It will be part-funded by bank credit of $1.2bn, with MCA and Rank jointly contributing the rest. The partnerships' first centre, Universal Studios Florida, is a movie-based theme park that opened in 1990. Total revenues in 1994 were $317m and operating profit was $51m.

Rank is seeking shareholder approval for the deal, which includes a buy/sell provision under which Rank may either buy MCA's stake or sell its own stake to the Americans. An emergency general meeting will be held on 3 October.

Investment Column, page 18