Walt Disney Company has boosted its stake in its less successful European sister and promised to support the struggling business with more cash.
The US company increased its share of loss-making Euro Disney, which runs a theme park in Paris, to 85.7pc from 76.7pc, by acquiring a stake from Saudi Prince Alwaleed Bin Talal's investment fund, Kingdom Holding.
It paid €2 (£1.70) per share for the 9pc stake in Euro Disney, payable in Disney stock, reflecting a 67pc premium to Euro Disney's closing price on Thursday, netting Kingdom Holding $61m (£48.8m).
Prince Alwaleed bought a 10pc stake in Euro Disney in a refinancing in 1994, two years after its opening. As a result of this transaction, Kingdom's ownership in Euro Disney will fall to 1pc.
AdvertisementAdvertise with NZME.
California-based Disney is also offering €2 per share in cash to acquire any remaining shares in Euro Disney.
Disneyland Paris opened in 1992 and has had financial problems for most of its life, struggling to cope with high levels of debt and low visitor numbers. It has been bailed out by Disney more than once before.
More recently, it has had to contend with weak economic growth on the continent and terror attacks in Paris, which have kept visitors away.
Disney said it has also offered to support as €1.5bn recapitalisation for Euro Disney. It comes two years after the parent company swooped in with a €1bn rescue package over 10 years to add attractions and spruce up grounds at the Paris resort.
Shares in Euro Disney jumped 65pc €1.98 in Paris, giving the company a market value of €1.55bn.
This week, Disney reported a 13pc rise in profits from its theme parks to $1.11bn, buoyed by higher spending at the domestic and international parks, including a Shanghai resort, which opened in June.
Kingdom Holding will have a 1pc share of Euro Disney following the deal, which it said was worth $151m and was in line with its investment strategy and continued confidence in the Disney brand.