Merlin Entertainments' shares rise on London debut

Friday 08 November 2013 18.00
Merlin Entertainments valued at £3.2 billion ahead of London IPO
Merlin Entertainments valued at £3.2 billion ahead of London IPO

Shares in Merlin Entertainments rose more than 12% in debut trade on the London stock market to value the Madame Tussauds and amusement parks operator at around £3.5 billion sterling.
              
The shares opened up 3.2% at 325 pence and hit a high of 355 pence before settling back to 347 pence, a 7% rise.
              
The private equity-backed company, the world's second-largest visitor attractions operator behind Walt Disney, had originally set a range of 280p to 330p per share.
              
Merlin, which closed the offering early due to strong demand, said 87.5% of the sale had gone to institutional investors such as pension funds, while individual members of the public had received 12.5% of the shares.

A person familiar with the matter said the sale of a 30% stake was nine times oversubscribed at the offer price.
              
Individuals who applied for the minimum £1,000 worth of stock received 317 shares each, while those who applied for higher amounts were allocated the 317 shares plus 55% of the rest of their order up to a maximum of 8,872 shares.
              
Lots of institutional investors who put in orders received nothing, a source close to the deal said.
              
The offering raised total gross proceeds of £957m for the company and its selling shareholders, prior to an over-allotment option which could see the size of the offering increased by 10% if there is strong demand.
              
The net proceeds for the company totalled £165m, which will go towards reducing debt.
              
Its owners, private equity firms Blackstone Group and CVC, company directors and employees and the Danish investment firm Kirkbi which controls Lego Group, all reduced their holdings.
              
Merlin put off plans for a listing in 2010 due to jittery markets, with shareholders instead selling a 28% stake to CVC. That sale valued the company, whose sites attracted more than 54 million visitors in 2012, at £2.25 billion.
              
Merlin's chief executive Nick Varney, who owned around 1% of the company prior to the flotation, stands to bank just under £10m from selling almost a third of his stake in the offering.