Rank tipped for Tussauds bid

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The Independent Online
Rank is believed to be casting an acquisitive eye over the Tussauds Group, the subsidiary of media conglomerate Pearson, writes Richard Halstead.

Analysts believe that Rank, which last week reaffirmed plans to invest pounds 300m a year for the next five years in its existing leisure businesses after its disposal of Rank Film Distributors, would jump at the chance of owning the UK's top two leisure attractions - Madame Tussauds and Alton Towers.

Tussauds, which last year made record profits of pounds 22.2m after an increased contribution from Port Aventura, its Spanish theme park, would fetch between pounds 270m and pounds 300m, they estimate.

But the City cautioned that Rank's new chief executive, Andrew Teare, would have to tread carefully after his pounds 100m purchase of pub group Tom Cobleigh last September, which was badly received by investors who thought he was overpaying for an indifferent brand.

"Rank would have to demonstrate a very strong case to investors before they would welcome another large acquisition," one analyst said.

Pearson has so far avoided making public its strategy for the future of Tussauds, but its chief executive, Marjorie Scardino, wants to focus on core media and publishing interests. Cash from the disposal of non- core assets such as its leisure business and its 50 per cent stake in merchant bank Lazards would be used to buy more publishing operations or enhance its Financial Times-Extel financial service.

Rank already has experience of theme park management through its joint venture with Universal Studios in Florida. The company announced plans for a pounds 2bn theme park on a site at Rainham in Essex in 1990, only to pull out of the project in 1993 as a result of the recession and environmental group pressure.

Neither Rank nor Pearson would confirm talks, but the leisure group has had a tilt at Tussauds before. In 1994 it approached Pearson about buying out its leisure interests but was rebuffed.

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