Madrid pulls out of WB theme park

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MADRID -- Madrid's regional government on Friday said it has pulled out of the Warner Bros. theme park here after three-and-a-half years of operations and sold its 43% stake in the park to building and construction company Fadesa, which plans to revamp the area.

Fadesa paid some €40 million ($50.8 million) to the Madrid government with the understanding that local theme park management company Parque Reunidos will manage the park for the next 10 years.

A handful of minority stakeholders like Warners, which holds just 4%, hotel chain NH Hoteles and Spanish construction firm ACS also have opted to sell their shares to Fadesa, which increases the builder's stake from an original 13.1% to a controlling 74%.

The sale, the fulfillment of a campaign promise by the present regional president who pledged to invest the funds in more necessary ventures like hospitals and schools, values the park at ?60 million ($76.3 million).

"Fadesa's offer satisfied a fundamental prerequisite -- to maintain the jobs that the park presently generates (some 1,000) and guarantee the future operation of the park as a stimulating element in the zone," Madrid presidential deputy Francisco Granados said at a news conference.

The only remaining minority shareholders are department store chain El Corte Ingles (4.4%) and Madrid bank Caja Madrid (21.8%).

Fadesa plans to turn the surrounding area into a commercial center dedicated to stores, shopping malls and hotels, with an additional section devoted to industrial warehouses.

The news made headlines, given that rival construction company Martinsa raised its bid to take over 100% of the family-owned Fadesa at €5.7 ($7.25) per share, valuing the company at some €4 billion ($5.1 billion). Fadesa posted a 9% rise in net profits for the first nine months of the year from last year, with €133 million ($169 million) earned through September. Analysts expected the bid to be accepted by Fadesa.

In late 2004, Madrid's Warner Bros. theme park broke its 99-year management contract with Six Flags, opting for self-management, while continuing its licensing agreement with Warner Bros, which maintained its 4% in the park until this week.

The park has been plagued by a hefty debt since its opening, though admissions rose a reported 11% this year.
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