* Merlin will sell at least 20 percent stake, some in new shares
* New shares intended to raise 200 mln pounds to reduce debt
* Terra Firma-backed Infinis also announces float plans
By Kylie MacLellan and Neil Maidment
LONDON, Oct 21 (Reuters) - Merlin Entertainments, whose attractions include the Madame Tussauds waxworks and Legoland theme parks, plans to sell at least 20 percent of its shares in a stock market debut in London next month.
Stronger equity markets have helped to support a pick-up in new London listings after several years of drought.
Moreover, strong public demand for shares in Britain's Royal Mail this month has led to predictions that more companies will look to tap small investors as part of London floats.
Chief Executive Nick Varney said he expected 10 to 15 percent of Merlin's offering to go to retail, with buyers having to invest at least 1,000 pounds. In return, they will get a 30 percent discount on an annual pass to Merlin sites for either two adults or a family.
The renewable energy generator Infinis Energy, owned by the private equity fund Terra Firma, also announced plans on Monday to list at least 30 percent of its shares in London in November, and include retail investors in the sale.
Merlin, which operates 99 attractions in 22 countries, said on Monday that an undisclosed proportion of the floated equity would be new shares intended to raise 200 million pounds ($324 million) to reduce debt.
Its owners, the Danish investment firm Kirkbi A/S that controls Lego Group and the private equity firms Blackstone Group and CVC, as well as company directors and employees, will also sell some of their holdings, the company said, although Kirkbi intends to remain a significant long-term shareholder.
Merlin put off plans for a listing in 2010 due to jittery markets, with shareholders instead selling a 28 percent stake to CVC. That sale valued the company, whose sites attracted more than 54 million visitors in 2012, at 2.25 billion pounds.
"Notwithstanding the recent American debt crisis that delayed things a little bit, the markets are very much more healthy, initial public offerings are being well received and investors have an appetite for investment in good assets," Varney told reporters after the announcement.
Another Blackstone-backed theme park operator, SeaWorld Entertainments, floated in New York in April, and saw its shares close up 24 percent on their debut.
Merlin, the world's second largest visitor attraction operator behind Walt Disney, posted underlying earnings before interest, tax, depreciation and amortisation of 346 million pounds in 2012. On Monday it said revenue in the 35 weeks to Aug. 31 was up 11.1 percent, supported by strong like-for-like growth and the impact of new attractions.
Varney said the company plans to grow in both the U.S. and China next year, including a Madame Tussauds in San Francisco and Beijing. It is also in the process of developing a Legoland park in Dubai and potential sites in Japan and South Korea.
Investec analyst James Hollins said Merlin's diversity made it difficult to value:
"They are nicely diverse in terms of geography and income stream. I think one of the tricky things will be where to place it in the market ... It is a relatively unique business."
Varney said potential investors would be likely to compare Merlin to U.S. theme park peers as well as UK leisure companies and consumer brands.
Disney is valued at a forward EV/EBITDA multiple of 9.6 times, while British hotel and coffee shop operator Whitbread is valued at 10.8 times and InterContinental Hotels Group at 11.5 times, according to Thomson Reuters data.
If Merlin's core earnings continue to grow at the annual 14.3 percent they have averaged over the last five years, they will reach nearly 400 million pounds in the 2013 financial year.
Chief Financial Officer Andrew Carr said Merlin had 1.2 billion pounds of net bank debt in June. With the money raised from the float, this would fall to around 1 billion pounds.
This would value the company's equity at 3 billion pounds, based on a notional 10-times EV/EBITDA multiple.
Goldman Sachs and Barclays are running the offering, and are joint bookrunners along with Citi and Morgan Stanley.