The board of Dubai’s mega theme parks operator, DXB Entertainments (DXBE) has recommended giving the go ahead to a cash offer from Meraas Leisure and Entertainment to buy 100 percent of its shares.

The offer is for AED 0.08 for each share, representing a premium of 189 percent over DXBE's net asset value per share of AED 0.0277 as of December 30th 2020. It will be considered by shareholders at a general assembly meeting on March 9th.  

Accumulated losses

The board’s recommendation to accept comes as DXBE released its 2020 financial statements, announcing accumulated losses of AED 7.8 billion ($2.12 billion), equivalent to 98 percent of capital ratio.

Video: DXBE board recommends shareholders vote in favour of Meraas cash offer

DXBE-operated Dubai Parks and Resorts, incorporating Legoland Dubai, Legoland Water Park, Bollywood Parks, Riverland, Motiongate, as well as the Legoland and Lapita hotels, was heavily impacted by the COVID-19 pandemic in 2020. It was forced to close for more than six months between March and September under measures to prevent the spread of the virus.

In a press release, the company said the number of visitors in 2020 was down to 802,121, a decrease of 69 percent on 2019.

International visitation, which accounted for 36 percent of total visitation, declined seven percent year-on-year, the company said.

Financial statements from year-end 2019 already showed accumulated losses of AED 5.16 billion.

The company’s detailed analysis of accumulated losses for 2020 show it had already embarked on cost savings and had put in place a strategy to deliver EBITDA breakeven at the end of 2019, but the timeline was impacted by the outbreak of the COVID-19 pandemic.

Remi Ishak, acting CEO and said: “2020 was a tremendously challenging year with major disruptions in travel and tourism as a consequence of the COVID-19 pandemic.

“The closure of the destination for a period of approximately six months had a significant impact on our operational and financial performance. We implemented our contingency plans and realised further cost savings during the year which partially mitigated the decline in revenues.

“In 2021, while material uncertainty around near term general economic conditions remains, we continue to focus on identifying and implementing further operating efficiencies, completing the enhancement program and hotel strategy, and preparing for a potential recovery in visitation.”

(Reporting by Imogen Lillywhite; editing by Seban Scaria)

(imogen.lillywhite@refinitiv.com)

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