China-based Zhonghong Zhuoye Group Co. has agreed to buy Blackstone Group’s 21 percent stake in SeaWorld Entertainment Inc.
- Blackstone sells stake in SeaWorld to China-based company
- Zhonghong Group will be largest shareholder of SeaWorld
- SeaWorld has faced declining revenue and attendance
Zhonghong Group will pay Blackstone $23 a share, SeaWorld announced Friday.
With the transaction, Zhonghong–a diversified holding company for investments in real estate, leisure and tourism–will become the Orlando-based theme park operator's largest shareholder.
"Zhonghong Group is making a significant, long-term investment in SeaWorld, reflecting their appreciation of the strength of our brand, our potential to grow the company and a shared commitment to protect wildlife and the environment," said SeaWorld CEO Joel Manby.
SeaWorld will increase the size of its board to 11, with two Zhonghong executives–Yoshikazu Maruyama, president of Zhonghong's American operation and Yongli Wang, Zhonghong's chief strategy officer–taking seats, the company said.
Under the agreement, Zhonghong won't be able to sell its stake for two years, and it cannot acquire more than 24.9 percent of SeaWorld's outstanding shares without the approval of independent directors.
The deal is expected to close in the second quarter.
Upon closing, Blackstone and its affiliates will no longer hold any shares in SeaWorld or seats on its board of directors.
Blackstone, which first bought stake in SeaWorld in 2009, once held a stake in Universal Orlando.
SeaWorld faced criticism after the release of the 2013 documentary "Blackfish," which depicted the captivity of killer whales as inherently cruel. Last year, the company announced it would end its orca breeding program.
SeaWorld has suffered from declining revenue and attendance for the last few years.