Tussauds seeks out London eye

LEISURE giant Tussauds Group has unveiled ambitions to take full control of the London Eye, the tourist attraction opposite Parliament that pulls in 3.7m visitors a year. And it plans to break into the casino market.

The company, which owns Madame Tussauds waxworks and the Alton Towers theme park, already holds a one-third stake in the Eye, which is desperately in need of refinancing due to hefty debt repayments.

British Airways, which also has 33% of the Eye, is thought to be keen to quit the business. Japanese bank Sumitomo has been brought in to advise on the refinancing.

Tussauds is eager to take London Eye's debt on to its own balance sheet and restructure the ownership.

'If there is a market slowdown, then the business starts eating into the debt and the banks can take the company back,' said Tussauds finance director Rob Roger. 'This makes us very nervous, and so we want to protect the business for the long term.

'We operate the structure, it fits into our portfolio. We are the logical party to run it and own it because that's what we do.'

Tussauds is going down the refinancing route set out by Sumitomo, but hopes to sort out an agreement under which Marks Barfield, the architecture firm that designed the Eye and owns a one-third stake, keeps a share while allowing Tussauds to invest in and expand the brand.

Tussauds, owned by private equity company Charterhouse Development Capital, is also talking to major international gaming operators about building casinos next to its theme parks. The company owns about 1,700 acres, of which only half is being used. But the move could be controversial as the venues are major attractions for children.

Tussauds Group chief executive Peter Phillipson said: 'You don't have to be a genius to fathom that Thorpe Park in Surrey is a great site for a mega-destination casino. It's on the M25, near several airports and has 22m people just two hours' drive away.'

The Gaming Bill being debated in Parliament will allow casinos to be built anywhere in the country rather than only in specially permitted areas. The spare land around Thorpe Park comprises fields and lakes that can be easily drained and built on, or used for car parking.

Tussauds would link up with an established casino operator to run the clubs.

'We have no experience of running casinos and we wouldn't want to put ourselves through the very tortuous licensing process,' Phillipson said. 'It makes sense for us to take on a partner and, not surprisingly there is a lot of interest in our sites.'

Tussauds is also planning hotels at Thorpe Park, Chessington World of Adventures in Surrey, and Heide Park, north Germany.