UK-based Merlin Entertainments, the owner of Lego Land, the London Eye and Madame Tussauds, could be valued at between £2.86 billion (€3.34 billion, $4.6 billion) and £3.34 billion following the company’s initial public offering on the London Stock Exchange, according to a statement.
The business, which is backed by The Blackstone Group, CVC Capital Partners and KIRKBI, the investment firm of Denmark’s Kristiansen family, said it expected its share price to be set at 280 pence to 330 pence. Merlin will use £200 million of the proceeds to reduce the company’s net debt, according to the statement. Between 20 percent and 30 percent of Merlin shares will be floated, of which 10 percent to 15 percent will be allocated to members of the public.
The minimum share purchase will be £1000, with individual shareholders being entitled to a 30 percent one-year discount on either two adult Merlin annual passes or one family Merlin annual pass, suggesting the company hopes to attract its own customers in the IPO.
Conditional dealings in the ordinary shares on the London Stock Exchange are expected to start on 12 November 2013. Blackstone, CVC and KIRKBI are each expected to sell a proportion of their shareholding in the IPO, according to the statement.
CVC and Blackstone did not respond to a request for comment at press time.
Blackstone purchased Merlin Entertainments from Hermes Private Equity in May 2005. The firm completed the acquisition on behalf of its Blackstone Capital Partners IV fund, which closed on $6.45 billion in 2002. Blackstone later merged Merlin and Lego Land when the firm bought a controlling position in the latter from Lego Group and KIRKBI for €375 million.
CVC bought a 28 percent stake in Merlin in 2010. Blackstone reduced its holding in the company as a result of the deal but retained a “significant stake”, PEI reported at the time. Merlin was then valued at £2.25 billion.
Permira-backed Just Retirement has also made headlines this week for its IPO on the London Stock Exchange, which is expected to take place in mid-November. Valuations for the financial services company, which works with clients in or approaching retirement, are likely to be lower than expected. Investment bankers, which began handling the offering on Tuesday when the road show started, put the market capitalisation of the business at between £1 billion and £1.25 billion, according to a source.
Last week, a source familiar with the matter said the listing could value the company as much as £1.4 billion. Permira took the company private in 2009 for £228 million.
The IPO will see a new share issue of approximately £300 million, which will be used to support future growth of the business. While Permira is understood to be likely to sell some shares, it will retain a significant stake in the company. The firm currently holds an 84 percent stake in the business.
Permira declined to comment.