US Debt Impasse Delays Theme Park Listing
The theme park operator behind Alton Towers and Madame Tussaud's is delaying a £4bn stock market listing amid growing nervousness about the possibility of a US debt default.
Sky News has learnt that Merlin Entertainments Group (MEG) has put on ice a London flotation until there is greater clarity about the resolution of the crisis around the debt ceiling in Washington.
European equity markets rose on Thursday amid more optimistic signs of an end to the US Government shutdown and tentative negotiations between Democrats and Republicans about a short-term extension of the country's borrowing limits.
However, City sources said that although Merlin was evaluating a flotation on a daily basis, it was now unlikely to be announced for several weeks at least.
"There's no rush for this company to go public," said a person close to Merlin.
The delay, about which the theme park group's investors are understood to be in agreement, underlines the disparate ways in which the US debt ceiling is affecting corporate activity in the UK.
When they do go ahead with the flotation, Blackstone and CVC Capital, the private equity groups which control the company, are expected to raise hundreds of millions of pounds from a share sale.
Tony James, president of Blackstone, wrote in an article for the Wall Street Journal last week, that US politicians were playing a form of Russian roulette over the debt impasse.
"Who could ever be so bored, so irresponsible, or have such low future aspirations that they would flirt willfully with death while having nothing to gain?
"Yet Congress is doing just that with the debt ceiling. Except there won't be just one victim. Every American will suffer," he wrote.
Merlin has approximately £1bn of debt, and analysts expect the stock market to value its shares at up to £3bn.
Operating almost 100 attractions around the world, including the Blackpool Tower and Thorpe Park in the UK, Merlin has become one of the country's biggest privately-owned companies, notching up profits of more than £250m last year.
The company abandoned a listing three years ago amid difficult markets and is anxious to avoid a repetition of that scenario.
In addition to Blackstone and CVC, the family behind the Lego toys empire is also a significant shareholder in Merlin.
Four investment banks - Barclays, Citi, Goldman Sachs and Morgan Stanley - will rake in millions of pounds in fees from their work on the eventual flotation.
Merlin and its shareholders declined to comment.