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Legoland Owner Picks Banks For London Float

Legoland Owner Picks Banks For London Float

The company behind Madame Tussauds, Alton Towers and other major visitor attractions has picked bankers to run the biggest public share sale of a British company since before the financial crisis.

Sky News understands that Barclays, Citi, Goldman Sachs and Morgan Stanley have been appointed to handle the listing of Merlin Entertainments Group, Europe's biggest theme park operator.

The quartet of investment banks were chosen yesterday by Merlin's board and private equity backers, and are now vying among themselves for the lead roles on the flotation, which could take place as early as this year.

Merlin, which also owns Thorpe Park and the Blackpool Tower, is expected by City analysts to be valued at as much as £4bn when it comes to the market.

Insiders said that a decision to list in London was still "not final" but that it was the overwhelming preference of the company's board and shareholders. They added that the company had struck a "tough deal" on the bankers' fees because of the intense competition in the City to win the mandate.

Merlin is owned by Blackstone and CVC Capital Partners, two of the world's biggest buyout firms, as well as the family behind the Lego toy business, and would be likely to head straight into the FTSE-100 given its potential £3bn-plus valuation.

If it proceeds with the listing, Blackstone, which has been an investor since 2005, is expected to sell a substantial chunk of its holding, while CVC is also likely to reduce its stake.

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.

The world's second-biggest theme park operator 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, 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 expanded its international business strongly in recent years, growing 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 and the former boss of Cadbury-Schweppes.

A spokeswoman for Merlin declined to comment.