* Euro Disney defends terms of Walt Disney takeover
* Disneyland Paris has struggled with losses and debts
(Adds comment from source familiar with the matter)
LONDON/PARIS, March 14 An activist hedge fund
has criticised plans by Walt Disney to take full control
of debt-laden Paris theme park operator Euro Disney,
according to a letter seen by Reuters.
Paris-based CIAM, which owns 1.4 percent of Euro Disney
shares, has written to the board of the French company to object
to what it believes are plans by Walt Disney to force out
minority shareholders. It said it has the support of more than 5
percent of Euro Disney shareholders, including its holding.
"The Walt Disney Company seeks to force out the remaining
minority shareholders by offering them a new public offer, under
penalty of having to undergo a strong dilution later," said the
letter, dated March 6.
CIAM has not declined Walt Disney's offer but is monitoring
the situation, a source familiar with the matter said.
Euro Disney defended the terms of the Walt Disney takeover.
"Given the financial challenges faced by Euro Disney, The
Walt Disney Company has developed a long-term solution that
takes into account all stakeholders," it said in a statement.
"We believe such an operation will provide Euro Disney with
a strong financial footing to continue its strategy, while
providing minority shareholders the opportunity to exit at a
significant premium," it added.
Walt Disney last month announced plans to take full control
of Euro Disney, after raising its stake to 85.7 percent through
a deal with Saudi billionaire Prince Alwaleed bin Talal.
Walt Disney has said it would also support a
recapitalisation of up to 1.5 billion euros, helping cut debt
and improve Euro Disney's financial position.
Minority shareholders will be offered 2 euros ($2.13) a
share to sell their stake to Walt Disney - a 67 percent premium
to Euro Disney's share price on Feb 9, which was the day before
the offer was announced.
Walt Disney will buy out and delist the remaining shares
from the Euronext Paris stock exchange if it gets to a stake of
at least 95 percent. The shares stood at 1.99 euros on Tuesday.
Disneyland Paris opened in 1992 and has struggled
financially for much of that time, after making overly
optimistic visitor projections and taking on too much debt.
Deadly attacks in Paris in 2015 by Islamist militants also
hit the broader French tourism sector, and Euro Disney racked up
a net loss of 858 million euros in 2016.
($1 = 0.9405 euros)
(Reporting by Maiya Keidan and Sudip Kar-Gupta; Editing by
Keith Weir and Jane Merriman)