London float to value PE-backed Tussauds owner at as much as $5.3 bln

Stronger equity markets over the last 12 months have helped support a revival of European new listings after years of drought due to the financial crisis. British insurer Just Retirement and French cable operator Numericable are among those currently taking orders for share sales.

Private-equity backed Merlin, which operates 99 attractions in 22 countries, said 20 percent to 30 percent of the company would be sold in the listing, in which it is offering its shares at between 280 pence and 330p each.

That would value the world’s second-largest visitor attraction operator behind Walt Disney Co at between 2.86 billion pounds and 3.34 billion.

Merlin, whose brands – along with the Madame Tussauds waxworks featuring figures such as Michael Jackson and Lady Gaga – also include the Legoland theme parks and the London Eye Ferris wheel, plans to raise 200 million pounds from the sale of new shares to reduce debt.

Its owners, the Danish investment firm Kirkbi A/S which controls Lego Group and the private equity firms Blackstone Group and CVC, as well as company directors and employees, will also sell some of their holdings, although Kirkbi intends to remain a significant long-term shareholder.

The company plans to grow in both the United States and China next year, including opening branches of Madame Tussauds in San Francisco and Beijing. It is also developing a Legoland park in Dubai and potential sites in Japan and South Korea.

“The listing will provide us with the platform for our next stage of development,” Chief Executive Nick Varney said.

Merlin put off plans for a listing in 2010 due to jittery markets, with shareholders instead selling a 28 percent stake to CVC. That sale valued the company, whose sites attracted more than 54 million visitors in 2012, at 2.25 billion pounds.

The offering, 10 to 15 percent of which is expected to go to private or retail investors, is due to be completed on Nov. 12.

Members of the public, who have to invest at least 1,000 pounds and in return will get a 30 percent discount on certain annual passes to Merlin sites, have until Nov. 8 to put in orders. Institutional investors, such as pension funds, will have until Nov. 11.

Goldman Sachs and Barclays are running the sale and are joint bookrunners along with Citi and Morgan Stanley.

Kylie MacLellan is a reporter for Reuters News in London