INVESTMENT bank Citi has been left holding shares in Merlin Entertainments after demand fell just as it underwrote a sale for the firm’s private equity owners.
Yesterday the bankers were left with stock amounting to somewhere below three per cent of Merlin, according to sources close to the deal – a holding worth as much as £100m.
The entertainment firm owns attractions including Madame Tussauds and Chessington World of Adventures. It floated on the stock market in August 2013, and the shares had performed relatively strongly until rougher market conditions hit in recent months.
Citi was involved in the sale of 75m shares in Merlin on behalf of CVC and Blackstone.
The stock was sold for 349p, representing a discount of around 2.5 per cent on the previous day’s trading – a typical discount for such a sale.
But market conditions have been choppy recently, leading to larger flotations and share sales being pulled. Sources close to the Merlin deal said that Citi fell victim to the conditions this time as prices fell mid-way through planning the sale.
The bank will hope to sell the shares on slowly over the coming days.
The stock closed at 351.5p yesterday, down 1.82 per cent on the day, indicating there is still some support for the shares.
Citi declined to comment on the transaction.