21st Oct 2013 11:19
LONDON (Alliance News) - A rush to list on London's stock markets accelerated Monday as Terra Firma proposed a float of wind power company Infinis Energy Ltd and Blackstone and CVC Capital Partners proposed to float Merlin Entertainments PLC, the owner of assets including Madame Tussauds, Legoland and Alton Towers.
Private equity companies are increasingly seeking to take advantage of the rising markets to realize returns on their investments, particularly in the wake of recent successful, and over-subscribed, flotations by estate agents Foxtons PLC and postal company Royal Mail Group PLC . Many private equity firms have had to sit on their portfolios since the financial crisis as markets plummeted and investor appetite for new listings soured.
Blackstone and CVC Capital are looking to raise GBP200 million by selling a 20% stake in Merlin, which also owns attractions like Thorpe Park, Chessington World of Adventures and Sea Life. A third shareholder, the Danish family-owned business Kirkbi which owns the Lego and Legoland trademarks, intends to remain a long-term shareholder with a significant holding, the companies said in a statement.
The shareholders intend to use the proceeds of the offering to pay down debt.
Merlin made revenues of GBP1.1 billion in 2012 and underlying earnings before interest, tax, depreciation and amortization of GBP346 million. It claims to be the second-largest entertainment attraction operator in the world after Walt Disney.
Terra Firma, the private equity company owned by Guy Hands, said it wants to sell a stake of up to 30% in Infinis Energy. It didn't say how much it is seeking to raise, but the Financial Times said the flotation could be worth GBP1 billion.
The IPO will have extra importance for Terra Firma, which is trying to bounce back from the GBP1.75 billion loss of its investment in EMI, the British music group that was seized by its lender Citigroup in 2011.
Terra Firma has reinvented itself as a green energy investment company and is determined to prove it can produce strong returns for its investors.
Infinis is the UK's largest producer of electricity from landfill gas and also runs onshore wind farms. Revenues have increased 19% and Ebitda 25% over the past three years. It is proposing to pay a dividend equivalent to an annual payout of GBP55 million for the period between its IPO and the end of the financial year in March 2014.
Foxtons, owned by private equity company BC Partners, saw its shares soar on debut after strong demand for the shares, but that was overshadowed by the rise in shares of previously state-owned Royal Mail, which jumped by over GBP1.2 billion in value in the aftermath of its flotation which was oversubscribed by between 7 and 20 times.
By Steve McGrath; [email protected]; @SteveMcGrath1
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