Merlin Entertainments tops up list of London attractions with aquarium buy

Merlin Entertainments, the visitor attractions operator behind Madame Tussauds and the London Dungeon, has acquired the London Aquarium in County Hall from the Japanese owners of the former Greater London Council headquarters.

The company, which is backed by Blackstone Group and Dubai International Capital (DIC), will convert the venue to its Sea Life brand and invest about £5 million in improving the aquatic displays and making it more child-friendly.

The price paid was not disclosed, although industry sources believe that Merlin’s total investment in acquiring and upgrading the business, and negotiating a new 35-year lease from Shirayama Shokusan, County Hall’s owner, will be well above the normal £5 million to £10 million cost of a new Sea Life centre.

Glenn Earlam, a divisional managing director at Merlin, said that although the new site would be integrated into the Sea Life chain, the name had yet to be decided. “There is value in the London Aquarium brand,” he said. “It’ll be something like the Sea Life London Aquarium or the London Aquarium by Sea Life.”

Mr Earlam said that the venue would sit neatly alongside Merlin’s three other attractions in the capital - Madame Tussauds, the London Dungeon and the London Eye. They draw about seven million visitors a year, while the London Aquarium attracts more than 750,000. “It will be included in joint tickets and promotions,” he said.

He claimed that visitor numbers so far this year at its venues in the capital were up on the same period last year, despite the economic downturn. He said that, although the weak dollar was having an impact on US tourists, the strong euro had boosted the number of visitors from Europe while encouraging more Brits to holiday at home. “Exchange rates are definitely having an effect.”

Merlin, which also owns theme parks such as Alton Towers, Chessington World of Adventures and the Legoland chain, has 28 Sea Life centres, of which ten are in the UK. By the end of the year it is scheduled to open three more, at its Gardaland park in Italy, the new Legoland in California and at Cuxhaven, Germany.

The group was created last March from the merger of Merlin, which consisted largely of the Legoland, Sea Life and Dungeon chains, with DIC’s Tussauds Group. Blackstone has a controlling stake of just over 50 per cent in the enlarged £2 billion company, with DIC holding 20 per cent and management the balance.

It subsequently raised £622 million through a sale and leaseback of some of its best-known attractions with Nick Leslau’s Prestbury property investment vehicle. However, the credit crunch put paid to plans to raise up to £900million by issuing bonds against future ticket sales.

The financial crisis has also delayed plans for an initial public offering (IPO), originally pencilled in for end of this year. Although Merlin is known to have discussed its options with investment banks including Goldman Sachs and UBS, it has yet to appoint advisers and is believed to have shelved IPO plans until the second or third quarter of next year at the earliest.

Suggestions that Blackstone could merge Merlin with Center Parcs, its holiday village business, in time for an IPO are believed to have been vetoed.