Nick Goodway: Merlin offers a smooth ride for investors
Thursday 31 October 2013
Outlook There may well be many good reasons for investing in Merlin Entertainments, but getting a 30 per cent discount on the price of an entry ticket to Alton Towers or Madame Tussauds is not one.
It is good that private investors are being given a look in on this £3bn flotation. It is not so good that they should be tempted in with a 30 per cent discount if they make a minimum investment of £1,000.
Merlin offers it own annual pass from as little as £107 which pretty much offers even better deals. And who has not seen the regular grocery promotions getting you into Chessington for half price?
So ignore the perks and look at the fundamentals. Merlin is a well managed business with good growth prospects. And theme parks are one of the few leisure pursuits not under threat from the internet.
For once the private equity owners of Merlin are not in a rush to cash out. They and the Legoland family are only selling down 10 per cent of their stakes.
At the lower end of the 280p to 330p range, Merlin shares should go well without too many rollercoaster thrills to come.
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