Tussauds Owner Merlin Picks London For Float

The company behind Madame Tussauds, Alton Towers and some of Britain's other biggest tourist attractions is to shun a listing in New York in a significant boost for the City.

I have learnt that shareholders and management at Merlin Entertainments Group have decided to float the company on the London Stock Exchange (LSE: LSE.L - news) , and will begin a formal process to appoint investment banks to handle the listing in the near future, insiders said today.

The decision to opt for London has not been finally formalised by Merlin's board, and there remains a slim outside chance that it could change its mind. However, people close to the situation said that Merlin executives and its private equity backers had decided in recent weeks to accelerate work on the UK listing.

"The work is all being geared towards London," one insider said.

A UK listing would provide a major fillip to the City's status as a capital-raising venue following years of growing dislocation between the interests of equity market investors and major issuers. It would also contrast with the likely decision of Markit Group, a major UK-based financial services group, to choose New York over London as the venue for its public company debut.

Merlin is owned by Blackstone (NYSE: BX - news) and CVC Capital Partners, two of the world's biggest buyout firms, and would be likely to head straight into the FTSE-100 given its potential £3bn-plus valuation.

The world's second-biggest theme park operator, which also owns Legoland and Thorpe Park, would rank as easily the biggest private equity-led flotation in London for several years, outstripping recent offerings by companies such as Countrywide, the estate agency chain, Crest Nicholson, the housebuilder, and esure, the insurance group.

Nick Varney, Merlin's chief executive, said at the time the company published its annual results in March that his preference was for a London listing but that other options were being actively considered.

Part of the reason for the deliberation over other options was that Blackstone has also recently pressed the button on a US flotation of Seaworld Entertainment (NYSE: SEAS - news) , the operator of marine-life visitor attractions.

The exact timing of Merlin's flotation is yet to be decided but Mr Varney has suggested that it could be as soon as the fourth quarter of this year.

The company has grown its international business very strongly in recent years, expanding rapidly in Asia and the US. In total, it now makes £1.3bn in annual profit.

Merlin is chaired by Sir John Sunderland, who is also a non-executive director of Barclays (LSE: BARC.L - news) and the former boss of Cadbury-Schweppes.

A spokeswoman for Merlin declined to comment.