The company has said it will produce a prospectus in the coming days and is hoping that some of the huge investor demand for Royal Mail shares rubs off on it.
Investors in the Royal Mail have already made 17.42 per cent on the launch price, and plenty will be looking around for the next opportunity.
Performance of stock since launch
Source: FE Analytics
Ben Lofthouse, manager of the Henderson Global Equity Income fund, says the level of investor interest in the Royal Mail was surprising and bodes well for future offerings.
It could be a sign of resurging investor sentiment which could boost IPOs such as Merlin in the coming weeks, he adds.
"It’s the first time for a long while we have seen that kind of enthusiasm for an IPO, and what has surprised people is how much money people have found to take a punt in these cash-strapped times," he said.
"If you make money, you feel better about investment. Since 2005 it has been difficult to make your money back in equities and post-2007 the prognosis has been cautious."
"You need to watch how popular Merlin is when it floats. It isn’t a yield stock [like the Royal Mail] but you will get perks as a shareholder."
"A good experience often means you come back for more. The drive for income-generating assets is longer term, though, for people who are losing from other areas."
"That demand is often a sign of the beginning of a bull market. I don’t think we are there yet, but it’s a speculative aspect rather than anything else."
The prospectus has yet to be published, meaning that conclusions about the offer’s value cannot be drawn.
However, Richard Hunter, head of equities at Hargreaves Lansdown, points out that the process for the Royal Mail from announcement to float was very quick, and it could well be the case that investors have little time to consider Merlin.
The first thing to note is what Lofthouse points out: the stock is unlikely to be a dividend payer, sitting in a more cyclical industry.
This was one reason the Royal Mail would have appealed to longer-term investors, with the offer price implying a yield of 6 per cent.
This could depress demand for the shares, and could be a real danger if the experience of Esure is anything to go by.
Esure was floated in March 2013 and performed modestly until early August when it announced premium growth in its insurance business to be lower than previously expected and a dividend that disappointed the market. Shares plummeted 20 per cent.
Performance of stock since Mar 2013
Source: FE Analytics
It wasn’t the only issue, but the disappointing dividend was clearly a blow. However, growth stocks have done rather well over the past 12 months, so it may be that the market is changing and appetite for Merlin will be strong.
Direct Line, which was spun out of RBS late last year, has performed strongly since launch, appreciating by more than a fifth, with its yield of 4 per cent an attraction.
Performance of stock since Oct 2012
Source: FE Analytics
Merlin is currently owned by private equity companies CVC, Blackstone and Kirkbi, the owner of the Lego Group.
Each of the three institutions will sell some of its stake, although the family-owned Kirkbi Group intends to remain a long-term shareholder.
The intention is for at least 20 per cent to be made available for public trading.
Individuals will be able to apply for a minimum of £1,000 of shares and will be offered a perk in the form of a 30 per cent discount on a family pass to the company’s attractions or on two adult passes.
While this may seem a weak reason to invest in a company, Lofthouse notes that this sort of perk has a long tradition in the UK and has been very popular.
The group runs a total of 99 attractions in 22 countries, including Sea Life, Madame Tussauds, the London Eye and Legoland as well as Alton Towers and Chessington World of Adventures.
It has increased its number of visitors by 11 per cent year-on-year since 2012, and achieved revenue growth of 12.9 per cent per annum.
As well as the successful flotation of Royal Mail, the decision to launch seems to have been inspired by a strong set of results this year.
To 31 August, group revenue rose 11.1 per cent to £889m – like-for-like growth was 7.1 per cent. Everything depends upon the offer price, of course, and investors will have to wait for the prospectus to see that.
One of the reasons for the Royal Mail seeing such interest was the price was widely blasted in the press for being too low.
Advocates of the valuation said this reflected the risk to the company of industrial action, but others pointed out that it would help the Government to ensure the flotation was successful and encourage investors.
Although the dynamics will be different, there will likely be a great deal of retail investor interest following the success of the Royal Mail's flotation.
This in itself could give the share price a boost, while observers will be keen to see if the return of strong investor sentiment is permanent.