Merlin Entertainments to list on London stock market

Global attractions operator Merlin Entertainments is heading for London's biggest stock market listing since the start of the global financial crisis, with its Chief Executive Nick Varney claiming investors have overcome their "suspicion" of private equity owned businesses.

UK-based Merlin, which operates Madame Tussauds and the Blackpool Tower in the United Kingdom, has become a major player in Australia and Asian attractions market in recent years and is Europe's top and the world's second-largest visitor attraction operator as well as being the world's biggest global aquarium operator.

The company is currently owned by buyout firms Blackstone and CVC, and the family behind Lego Group. The group is hoping to raise more than £3 billionn from an initial public offering.

Varney has steered the company through 14 years of private equity ownership, was forced to pull a planned IPO in 2010 as the markets remained closed for business during the aftermath of the credit crunch.

In a CNBC interview Varney explained "we got a very positive response to Merlin every time we went to see somebody but at that point there was still a shadow of suspicion stalking the markets and a little bit of mutual distrust between private equity and the big institutions.

"One of the big changes now is I think that's all dissipated and gone away. Institutions are recognising there are some really good companies out there that have been brought through by private equity and that will make great IPO candidates."

The group, many of whose assets were once owned by the media conglomerate Pearson, has bank debts of £1.2 billion at the end of 2012 3.5 times its £346 million underlying earnings.

Merlin is looking for four or five banks to handle its listing, which is expected at the end of this year or in the first three months of 2014. Varney said he was ready to move to public ownership in order to be able to make longer term investment decisions than are allowed under the three to four year private equity returns cycle.

Based in Poole, Dorset (which is also the home to global fitness company Fitness First), Merlin operates 94 attractions, seven hotels and two holiday villages in 21 countries and across four continents attracting 50 million visitors annually and employing more than 20,000 staff.

Merlin currently has thirteen attractions in Australia and New Zealand including the Hotham and Falls Creek Alpine Resorts in Victoria; WILD LIFE Sydney Zoo and WILD LIFE Hamilton Island; Madame Tussauds Sydney; Illawarra Fly Treetop Adventures and Otway Fly Treetop Adventures & Zip Line; the Sydney Tower Eye & SKYWALK; and SEA LIFE Sydney Aquarium, Manly SEA LIFE Sanctuary, Melbourne Aquarium, Underwater World in Mooloolaba, Queensland; and Kelly Tarlton's SEA LIFE Aquarium in Auckland.

Image: The Sydney Tower Skywalk. 

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