Merlin values itself at £3.3bn

The theme park operator will make its second attempt at staging a stock market debut next month. So far, so good.

by Emma Haslett

If Merlin’s IPO was one of its attractions, it would be more ‘queuing to stare at wax-works’ than ‘reaching the loopy bit of a rollercoaster’ – particularly when compared with the white-knuckle ride that was its last attempt.

So far, the run-up to Merlin’s listing has been so smooth it’s threatening to get boring: having announced its IPO earlier this month, the company said today it expects to be worth as much as £3.3bn when it debuts on the stock market next month.

The theme park operator, which runs 99 attractions in 22 countries (including Madame Tussauds, Alton Towers, the London Eye and Legoland), added that it would sell 20% to 30% of the company, with shares priced at between 280p and 330p. Merlin is already the world’s second-largest visitor attraction operator by market cap, behind Walt Disney, but if it can pull off the listing at that price, it would value it at between £2.86bn and £3.34bn.

As part of the listing, the company’s backers – Blackstone Group, CVC and Kirkbi (the Danish parent company of Lego) – will sell some of their holdings, although Kirkbi apparently intends to ‘retain a significant shareholding’.

The group has come this close to flotation before: in 2010, as markets proved they were the financial equivalent of a rickety fairground helter skelter, Merlin pulled the plug on its IPO at the very last minute.

This time round, though, things are looking good: not only are markets more settled, but the company’s financials are strong. Last year it attracted 54 million people, generating revenues of £1.1bn and profits of £346m. This morning it said revenue in the 35 weeks to the end of August had risen by 11.1% to £888.7m.

If that’s not enough to get investors reaching for their wallets, there’s one last incentive: Merlin shareholders get a 30% discount on entry to its parks. That’s what we call investor relations…

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