Garry Weiss, who made his name as a corporate raider alongside Sir Ron Brierley in Industrial Equity, Brierley Investments and GPG, has taken a strategic stake in troubled Ardent Leisure.
Ardent Leisure, is the embattled Australian tourism group which has failed to rebuild public confidence following a fatal accident last year at its Dreamworld theme park.
If history is any guide, Dr Weiss will use the strategic stake to purge the board and management as part of a strategy to lift performance and the company's share price.
Through Ariadne, another company with a long New Zealand history, Dr Weiss has taken up a 5.7% stake of Ardent's stock in what brokers see as a possible prelude to forcing board and management changes.
Morningstar analyst Brian Han said the 5.7% stake was unlikely large enough to get a board seat.
However, the key decision makers at Ariadne, especially Dr Weiss, were not known to be timid, passive investors.
''We previously argued the languishing stock price could prompt a board rethink in terms of Main Event's roll-out scale in the United States, with positive implications for capital management initiatives.''
The presence of Ariadne on the register could well be the catalyst, not to mention the potential value from Ardent's excess land next to Dreamworld - a tempting development opportunity, especially given surging Asian interest in the Australian property market, he said.
The excess land was next to three of Australia's premier theme parks - Dreamworld, Village's Movie World and Wet 'n' Wild. It was close to several golf courses, 10km from a Westfield shopping centre and a short drive to the Gold Coast beach front.
A 30min drive south there was also the newly refurbished Jupiters casino, and a 30min drive north there would be the mega $A2 billion ($NZ2.2billion) Queen's Wharf integrated casino resort in Brisbane, due to open in 2022.
''As such, the potential upside of the excess land could be significant if rezoned, although Ardent has been guarded on this issue.''
Mr Han noted private equity giant Blackstone last week offloaded its remaining 21% shareholding in US-based SeaWorld Parks & Entertainment. The buyer of the stake was China's Zhonghong Zhuoye Group at a 33% premium to SeaWorld's share price before the deal, highlighting not just the strong Chinese appetite for property-based leisure assets, but a recent example of private equity making money in the sector.
Morningstar believed Ardent Leisure was undervalued. Its shares were trading at a 16% discount to its unchanged $A2.15 fair value. The share price jumped more than 10% after Ariadne took its stake to $A1.80 on heavy turnover.
Shares were trading about $A2.85 before the accident and peaked at about $A3.20 in 2014.
Mr Han said another thing affecting his view on Ardent being undervalued was Dave & Buster's, a peer to Ardent's Main Event family entertainment unit in the US.
Dave & Buster's released a result showing how stellar growth could be still achieved in the competitive leisure-dining market. Its comparable store sales lifted 3.2% in the three months to January, a stark contrast to the combined 4.1% fall suffered by Main Event in December 2016 and January.
Dave & Buster's comparable sales performance had exceeded the industry average for 19 straight quarters, he said.
As an operator of a wide array of leisure-based assets, Ardent was highly susceptible to consumer sentiment and any macroeconomic changes affecting discretionary spending.
Another factor outside management's control was weather, which could have considerable influence on the theme parks division, Mr Han said.
More structurally, while competition for leisure dollars had always been significant, the intensity could elevate to another level in the digital online era.
Most of Ardent's physical offerings - except boat-berthing in the marinas division - could be enjoyed in a virtual world, such had been the development of digital technology and gaming tecnology.
