Blackstone-backed Merlin soars on London debut

The UK-based leisure group - which has seen its revenues grow from £50m to more than £1bn under Blackstone's ownership - was valued at £3.2bn when its IPO priced on the London Stock Exchange this morning.

The private equity shareholders behind Merlin Entertainments are in line to share proceeds of more than £1 billion, after the UK-based leisure operator enjoyed a successful debut on the London Stock Exchange this morning.

Merlin shares priced at 315p, valuing the business at £3.2 billion ($5.1 billion; €3.8 billion), and subsequently rose as high as 355p in early trading. 

At 1030 GMT, the stock was priced at 342p, up 8 percent, valuing the business at just under £3.5 billion.

Blackstone first bought into the company into 2005, when its revenues were less than £50 million. Since then the business has grown steadily through a series of acquisitions: it now operates nearly 100 attractions across Europe, North America and Asia, including Legoland, Madame Tussauds, the Blackpool Tower and The London Eye. Revenues topped £1 billion for the first time last year.

Blackstone reportedly hoped to float the business in 2010, but was unable to do so because of market turbulence. Instead, it brought in CVC Capital Partners as a co-owner. Dubai International Capital exited the business at the time of this deal, but KIRKBI, the Danish family office that manages the Lego fortune, maintained its existing stake. 

Following today's share sale, KIRKBI will hold 29.9 percent of Merlin stock, while Blackstone will retain 22.6 percent, CVC 13.1 percent and management 4.4 percent. The selling shareholders will share proceeds of £1.05 billion if the over-allotment option is exercised in full, Merlin said.

“Merlin's remarkable transformation is down to [its] visionary management team and dedicated employees, whom we backed with substantial capital investment,” Joe Baratta, Blackstone's global head of private equity, said today. “As major shareholders in the business, we look forward to supporting them in the next chapter in the Merlin success story.”