Public offered a ride on theme park flotation

 
Michael Bow
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ALTON Towers owner Merlin Entertainments yesterday said members of the public will have the chance to become shareholders in the company when it floats in London next month, with a minimum investment of just £1,000.

The business, which also owns Madame Tussauds and Legoland, plans to raise £200m in an initial public offering of shares. Its private owners will also sell a 20 per cent stake in the company onto the market.

Bankers speculated that the stake could be worth around £650m, giving the company a market cap of about £3.2bn, putting it on the edge of the FTSE 100. Around two per cent of the company will eventually be sold to the general public, with Merlin throwing in 30 per cent off an annual theme park season ticket to sweeten the deal for punters.

The move underscores the recent boom in interest from private shareholders following the runaway success of the Royal Mail offer. The minimum investment in that offering was £750.

Chief executive Nick Varney told City A.M. that management had decided to have a retail component to the float as early as 2009, but were in the minority among their advisers.

“We always felt we were looking for a diverse shareholder register and felt the general public would want to own shares in things like the London Eye,” he said. “We see the retail component as the small investors’ opportunity to partake in some iconic brands.”

Private equity backers Blackstone and CVC Capital Partners are expected to sell out of their stake entirely in time, with the majority shareholder, ex-Lego boss Kirk Kristiansen, likely to keep a stake in the company in future.

The company is currently expanding at a rapid rate, with plans next year to open new sites including a Madame Tussauds near Tiananmen Square in China. The firm has grown revenues by around 13 per cent a year since 2008.

ADVISERS MERLIN

MICHAEL LAVELLE
CITIGROUP

MERLIN recruited five top investment banks to help get its flotation away. Citigroup, Goldman Sachs, Barclays, Morgan Stanley and Lazard will all pick up the traditional lucite tombstones for their work on the float.

Citi’s efforts are led by EMEA capital markets origination boss Michael Lavelle, UK corporate broking head Andrew Seaton and seasoned rainmaker David Wormsley.

Lavelle oversees all of Citi’s capital markets business across Europe, made up of six units including equity capital markets, leverage finance and project finance.

Before being promoted, he was head of one of the six units, equity capital markets, between February 1999 and April 2008.

Seaton recently worked as joint adviser to IMI on its recent $1.1bn sale of Beverage Dispense and Capital Return to the Marmon Group, which is owned by Warren Buffett’s Berkshire Hathaway.

Seaton also led Citi’s sole sponsorship in the first quarter this year of bookie William Hill’s rights issue to raise £385m, which was used to part finance the acquisitions of Sportingbet and the buy-out of Playtech’s option from its online business.

Wormsley, who helped broker the mega merger between mining giant Xstrata and commodity trader Glencore, was also on the ticket for Citi.