Mixed views over Merlin Entertainments shares

Merlin Entertainments logoStock market analysts have voiced differing views about the potential worth of buying shares in Merlin Entertainments.

The company, which operates Alton Towers, Thorpe Park and Chessington World of Adventures, will be placed on the London Stock Exchange in November.

The initial price per share will be between £2.80 and £3.30, and investors must make a minimum purchase of £1,000.

John Ficenec of the Daily Telegraph newspaper said of the flotation: “There is little to be excited about here, avoid.”

“The sale looks like a classic private equity exit. Private equity firms run funds that typically have a ten year life span, they invest in assets like Merlin for five years then sell during a five year period,” he added.

Meanwhile, The Independent’s Nick Goodway said that Merlin offered “a smooth ride for investors”.

“Merlin is a well managed business with good growth prospects. And theme parks are one of the few leisure pursuits not under threat from the internet,” he said.

The company will be listed on the stock market on 12 November, with pre-trading of shares available in the days before that time.

Merlin’s chief executive Nick Varney said: “We believe that Merlin Entertainments has bright prospects and the listing will provide us with the platform for our next stage of development. We look forward to embarking on the next stage of the process.”