Monday, 4 November 2013

Merlin Entertainment's IPO

Merlin Entertainment currently has its IPO going, with applications being accepted until 5pm on Thursday. Merlin owns all Legoland resorts, the London Eye, Madame Tussauds, Alton Towers and loads of other theme parks around the world. Up to 20% of shares will be sold off, valuing the business at £2.86bn - £3.34bn. The minimum value to apply for is £1000, so I won't be buying any before conditional trading begins next Tuesday. Actually, I'm not sure I'll buy any at all. Don't get me wrong, I love theme parks and Walt Disney theme parks have seen their share price rise 99% in the last 2 years, but Merlin is over £1bn in debt. I think they're floating on the back of Royal Mail, hoping that the new IPO enthusiasm will bring in more cash. But these are private owners, wanting as much as they can get for their shares, while Royal Mail was state owned so no-one lost out personally from selling it on the cheap (which I think we can now all accept that it was at 585 and still rising). Merlin's growth also looks good on paper, but that's also mainly because of it's rapid expansion through takeovers of other companies. So anyway, I might do a quick in and out trade within the first fortnight if the grey market looks optimistic, but there's no way I'm holding onto these shares.

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