Merlin IPO fulfils retail investor promises

Shares in Merlin Entertainments have been priced at 315p for the company's flotation, giving the Madame Tussauds owner a total valuation of almost £3.2 billion.

Retail investors received 12.5 per cent of the offer, well within the range expected by Merlin prior to the offer. 

The offer price was towards the upper end of the range, which was set between 280p and 330p per share.

On Monday, Merlin brought the deadline for applying for its shares forward to 5pm on 7 November. 

Originally retail investors would have had until 5:00pm on 8 November, while institutional investors were given a deadline of 5pm on 11 November.

Strong demand is said to have been the force behind closing the application process early.

Conditional dealings in the shares commenced today, while formal admission and unconditional dealings in the shares will commence on Tuesday 12 November.

The global offer comprises 303.8 million ordinary shares, excluding over-allotment arrangements and represents 30 per cent of Merlin's share capital on admission.

 Merlin predicts proceeds of approximately £957 million to be raised by the company and the selling shareholders, which are a group of private equity firms.

 Two such parties, Blackstone and CVC, have granted the over-allotment option in respect of 30.4 million ordinary shares split equally between them. If the over-allotment option is used in full, total gross proceeds are expected to reach more than £1 billion.

Following admission the selling shareholders will still hold significant shares in the company.

The split will be 29.9 per cent by KIRKBI, 22.6 per cent by Blackstone and 13.1 per cent by CVC - assuming the over-allotment option is not exercised.

Merlin management will hold 4.4 per cent of the ordinary shares.

 The global offer saw institutions allocated 87.5 per cent and retail investors 12.5 per cent through intermediaries.

Retail investors who applied for the minimum of £1,000 of shares have been allocated 317 ordinary shares worth £998.55. Those who applied for more than £1,000 worth have been allocated 317 plus 55% of the excess amount up to a maximum of £27,947.

Nick Varney, chief executive of Merlin, said: 'We are delighted with the strong response from both institutions and retail shareholders to our offer. We have long stated our belief that becoming a public company was Merlin's ultimate destiny, providing the right long-term ownership to enable the next stage of development. 

Goldman Sachs is acting as stabilising manager on behalf of the company and selling shareholders and has been granted the over-allotment option. This must be exercised no later than 30 days from today.

This story was written by our sister website www.iii.co.uk

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