Shares of SeaWorld Entertainment (SEAS) have dropped in early trading following a report that the operator of Legoland had approached the theme park operator about a potential bid.

WHAT'S NEW: Bloomberg reported yesterday, citing a source, that Merlin Entertainments, the U.K.-based operator of Legoland and owner of Madame Tussauds, has approached SeaWorld over a possible deal. Merlin has made a bid for part of SeaWorld, which could be a hurdle to a deal as SeaWorld prefers an outright sale rather than break itself into pieces, according to the report. SeaWorld has also received indications of interest from other parties, the source said. "We do not comment on speculation or rumors," SeaWorld said.

WHAT'S NOTABLE: SeaWorld said last month it would replace David D'Alessandro as chairman with Yoshikazu Maruyama and elected Donald Robinson as lead independent director. Maruyama, a SeaWorld director since June, is president of Zhonghong Group's American operation and represents the perspective of a significant, long-term shareholder, SeaWorld said in a statement at the time. Earlier this year, Blackstone (BX) agreed to sell its 21% stake in SeaWorld to a subsidiary of Zhonghong for $23 per share. "Zhonghong Group is making a significant, long-term investment in SeaWorld, reflecting their appreciation of the strength of our brand, our potential to grow the company and a shared commitment to protect wildlife and the environment," SeaWorld CEO Joel Manby said. In June, SeaWorld disclosed that it received subpoenas from the Department of Justice and Securities and Exchange Commission regarding its response to "Blackfish," a documentary critical of the company's treatment of killer whales. The investigations were in connection with "disclosures and public statements made by the company and certain executives and/or individuals on or before August 2014, including those regarding the impact of the 'Blackfish' documentary, and trading in the company's securities." SeaWorld also said its board formed a special committee comprised of independent directors with respect to the inquiries. In late July, Dealreporter said that the amusement park operator added Evercore as a second financial advisor, joining incumbent JPMorgan.

DEAL 'COULD MAKE SENSE,' BUT: In a note to clients, SunTrust analyst Michael A. Swartz said that a deal between Merlin and SeaWorld "could make sense." Swartz, who kept a Buy rating and $16 price target on SeaWorld, said a deal could be logical given that both companies have assets in Southern California and Florida and have a similar customer base. While Swartz noted that a deal could enable the companies to compete more effectively with the "800lb gorillas" that dominate their markets, but two investors that currently control about 35% of SeaWorld's outstanding shares could hinder a deal.

PRICE ACTION: Shares of SeaWorld are down about 1% to $14.02 in early trading.

OTHERS TO WATCH: Other theme park operators include Cedar Fair (FUN), Six Flags (SIX) and Disney (DIS).