London Eye and Alton Towers operator Merlin Entertainments plans £3bn flotation


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Merlin Entertainments, the theme park operator behind the London Eye, Alton Towers, Madame Tussauds and Legoland, today outlined plans to raise £200 million by floating a fifth of the company on the London stock market.

The initial public offering values the private equity-owned business, which operates 99 attractions in 22 countries, at £3 billion.

Chief executive Nick Varney said buoyant demand for Royal Mail’s soaring shares, particularly among retail investors, had inspired confidence. Small investors can buy into Merlin’s float with a minimum £1000 investment — a third more than the minimum spend on Royal Mail stock — but Varney said: “For a lot of Londoners, it’s a chance to own a bit of the London Eye and Legoland.”

Merlin, whose other sites include Chessington World of Adventures and Warwick Castle, is the world’s number two attractions company after Walt Disney. Its current backers, private equity firms Blackstone and CVC, are to sell some of their stake in the IPO. But Kirkbi, the Danish family-owned firm which owns the Legoland and Lego trademarks and three-quarters of the Lego Group, said it intends to retain a significant shareholding following the flotation.

Varney said the £200 million would be used to pay down debt and expand in Asia, and added: “This is about also settling the long-term ownership and structure of Merlin without being bought and sold every three to five years.”

The company has identified 100 possible new sites for attractions such as Sea Life, Madame Tussauds, and other Eye wheels around the world, and is aiming to open a new Legoland park every three years, in countries such as Japan and South Korea.

Retail investors will receive a 30% discount on an annual Merlin pass to attractions.

Discount days out: Are they a bargain?

Retail investors in the Merlin flotation will receive a 30 per cent discount on an annual Merlin pass, giving a year’s entry to attractions ranging from The York Dungeon and Madame Tussauds in Blackpool to Weymouth’s Sea Life Tower and Legoland Windsor.

Keen money-savers may not be too impressed: the pass is already available at a 25 per cent discount on Merlin’s website, or for £50 via Tesco’s Clubcard scheme.

But Mr Varney said: “Whether investors can get a better offer on tickets by Googling is up to them.

“The fundamental point for someone to invest in Merlin  is because it’s delivered 13 years of double-digit profit growth.”