SeaWorld Entertainment Inc (NYSE:SEAS) shares made a splash Tuesday after the company announced a $150 million stock buyback and an increased investment from Hill Path Capital.
The iconic theme park company announced the decision Tuesday to repurchase approximately 5.6 million shares from an affiliate of Pacific Alliance Group.
Separately, Hill Path will purchase about 13.2 million shares from Pacific Alliance, bringing its stake up to 34.5% from 16.6%.
The stock was at high-tide, finishing up almost 17% at $31.78. Its Tuesday high of $32.50 is its highest point in more than five years.
"The company's decision to buy back shares underscores management and the Board's belief in the Company and its prospects and that SeaWorld is a highly attractive investment opportunity,” Chairman Yoshikazu Maruyama said. “The buyback also reinforces the Company and the board's commitment to opportunistically use excess capital to return value to shareholders."
As part of Hill Path’s equity uptick, SeaWorld agreed to appoint as many as three Hill Path selections to its board.
The firm also holds a 4.15% stake in Dave & Busters Entertainment Inc (NASDAQ:PLAY), according to CNN.
Eric Wold, an analyst at B. Riley, said the move creates a stable SeaWorld shareholder base and boosts the company's future earnings power.
Shares have increased more than 80% in the past year. The turnaround followed a rocky few years after its IPO in April 2013. The documentary Blackfish brought to light a history of orca abuse in July of that year, and in August 2014, shares fell 33% in one day on a disappointing quarterly report.
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