SeaWorld stock surges in 1st day on NYSE

[April 20, 2013]  NEW YORK (AP) -- SeaWorld Entertainment Inc.'s stock surged Friday in its first day of trading on the New York Stock Exchange.

The owner of theme parks famous for water shows featuring killer whales and dolphins rose $4.82, or 17.9 percent, to $31.82 in late morning trading after rising as high as $31.93 earlier.

SeaWorld, formerly Busch Entertainment Corp., announced in December that it was planning to go public.

The initial public offering of 26 million shares was priced at $27 per share, which was at the high end of the expected range of $24 to $27 per share.

The IPO's size also increased from the 20 million shares that SeaWorld and its owner, private equity firm Blackstone Group LP, had hoped to sell. The pricing of the offering and boost to its size suggests that there was solid demand for the shares.

SeaWorld offered 10 million shares, while Blackstone offered 16 million shares, raising a combined $702 million. The banks managing the deal could also buy another 3.9 million shares, which would raise total proceeds of the deal.

SeaWorld will receive about $245.4 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. The company won't receive any proceeds from shares sold by Blackstone, which bought it from the brewer Anheuser-Busch InBev for $2.3 billion in 2009. Blackstone will still have a majority stake in SeaWorld after the IPO.

SeaWorld plans to use part of the net proceeds to repay debt and to pay a one-time fee to Blackstone.

From its origins as a Busch Gardens animal park at Anheuser-Busch's Tampa Budweiser brewery, the company has grown to span 11 theme parks housing 67,000 animals. Besides the three SeaWorld parks, the company owns two Busch Gardens parks, several water parks and Sesame Place, an amusement park based on the children's TV show Sesame Street. It had net income of $77.4 million on revenue of $1.42 billion in 2012.

SeaWorld had warned in a December filing with the Securities and Exchange Commission that its business is dependent on customers' willingness to spend on leisure and entertainment. The company has managed to do well despite lingering concerns about the economy and high unemployment in the U.S. Its revenue has risen in the time it's been owned by Blackstone. SeaWorld has also looked for ways to stay competitive in the current market, branching out last year with a Saturday morning television show, "Sea Rescue," on the ABC network to attract young viewers.

Anheuser-Busch started Busch Gardens in Tampa in 1959. The beer company bought SeaWorld, whose park opened in San Diego in 1964, in 1989. SeaWorld is now based in the theme park mecca of Orlando, Fla., also home to Walt Disney Co.'s Walt Disney World resort and Universal Studios. More than half of Seaworld's revenue is generated in Florida.

SeaWorld said about 24 million people attended its 11 parks during the 12 months ended Sept. 30. The company did not disclose how that figure has grown or shrank in the past few years, but says it has a "stable attendance base."

Some of SeaWorld's competitors have had a difficult climb back from the recession. Amusement park operator Six Flags Entertainment Corp. filed for bankruptcy protection in 2009, emerging in mid-2010. It has been growing revenue since then, although it posted a loss in 2011.

SeaWorld is not the only strong IPO debut this week. On Wednesday shares of the popular New York grocery store chain Fairway, which is trading on the Nasdaq under the "FWM" ticker symbol, closed up 33 percent.

SeaWorld's stock is trading under the "SEAS" ticker symbol. Its offering is expected to close on Wednesday.

[Associated Press]

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