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Midday Report: Blackstone-Owned SeaWorld Readies IPO

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By DailyFinance Staff

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SeaWorld looks to make a big splash on Wall Street: The theme park operator is going public, probably launching its initial public offering this month.

It will offer 20 million shares, expecting to price them between $24-27 apiece.

The company operates 11 theme parks. There are the three SeaWorlds, located in Orlando, San Diego and San Antonio, and it also owns Busch Gardens, Sesame Place and several other water-themed parks.

Its kingdom includes 67,000 animals, the most famous of which are the Shamu killer whales.

The company is owned by Blackstone Group (BX), the world’s largest private-equity firm. It bought SeaWorld in 2009 from Anheuser-Busch (BUD) for $2.7 billion.

The initial pricing numbers value SeaWorld at about $5 billion dollars.

Blackstone opted for the IPO instead of selling SeaWorld. Both Apollo Global (APO) and Onex Corp. (OCX) had reportedly offered to buy the company.

And the theme park business has been profitable. SeaWorld’s earnings surged to more than $77 million dollars last year, up from $19 million in 2011. Revenue rose 7 percent to $1.4 billion.

The IPO is expected to raise about $500 million. Half will go to Blackstone, half to SeaWorld. It will use the money to reduce debt. Blackstone will continue to be the majority shareholder.

And theme park stocks have been doing quite well. Six Flags (SIX) has soared 60 percent over the past year and Cedar Fair (FUN) has gained 41 percent.

Blackstone launched a successful IPO last month: Pinnacle Foods (PF). It’s the maker of Duncan Hines, Birds Eye and other well-known brands. Its stock has jumped 20 percent since it was launched late last month.

But there are risks. SeaWorld notes in its SEC filing that economic conditions can hurt attendance, which declined in 2009 and 2010 due to the global economic crisis.

In addition, SeaWorld also noted the risks of featuring animals. In February 2010, a trainer was killed by a whale during a performance.

But SeaWorld is a popular and profitable brand that will probably draw a fair amount of interest when it debuts here at the NYSE.

-Produced by Drew Trachtenberg

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Business, Finance, Occupation & Industry

Market Minute: Wendy's Lowers Obamacare Cost Estimate

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By DailyFinance Staff

Store manager Mark Saad, right, serves a customer during the lunch hour rush at a Wendy's Restaurant Wednesday, Oct. 3, 2007, in Dublin, Ohio. Photographer: Jay LaPrete/Bloomberg News

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Jay LaPrete/Bloomberg NewsStore manager Mark Saad, right, serves a customer during the lunch hour rush at a Wendy’s Restaurant in Dublin, Ohio.

Produced by Drew Trachtenberg

Wendy’s (WEN) has sharply lowered its estimate on how much Obamacare will cost employers. It now says the Affordable Care Act could cost about $5,000 per restaurant. That’s down from an earlier estimate of about $25,000 dollars. Other restaurant chains are also finding the health–law would not be as expensive as they had feared.

A bankruptcy court judge has cleared the way for AMR’s (AAMRQ) American Airlines to proceed with its $11 billion merger with US Airways (LCC). The deal still needs the approval of regulators and US Airways’ shareholders. But the bankruptcy court rejected, at least temporarily, a $20 million severance payment to American’s outgoing CEO.

Chevron’s (CVX) board is cutting the pay of its CEO by more than 10 percent. The Wall Street Journal says the board wants to deliver a message following a series of a series of accidents and other mishaps. Other top executives also face a cut in their bonuses and stock compensation.

Blackberry (BBRY) has reported a surprise quarterly profit, but revenue was weaker than expected.

Software maker Red Hat (RHT) said its quarterly revenue rose 17 percent, but that was weaker than expected, and the company’s stock is set to tumble.

Food maker Pinnacle goes public today at a higher-than-expected $20 a share. Its best-known brands include Duncan Hines, Log Cabin syrup, and Van de Kamp’s frozen fish.

And Biogen Idec (BIIB) has won FDA approval for a new oral drug to treat multiple sclerosis. It’s expected to be a blockbuster, with sales topping a billion dollars.

Today is the final day of trading for this holiday-shortened week. The market is closed tomorrow.

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