iNVEZZ.com, Monday, December 16: UK-based leisure and entertainment group Merlin Entertainments (LON:MERL), which debuted on the London Stock Exchange on November 13, will join the FTSE 250 mid cap index later this month. The company, which raised a total of £1.0 billion in its IPO, narrowly missed out on entry into the blue chip FTSE 100 index in the indices’ quarterly review.

It instead becomes one of eight new additions to the FTSE 250, which comprises the 101st to 350th largest companies by market capitalisation on the London bourse. The FTSE 250 is the second most popular UK index after the Footsie and is tracked by a number of index funds and investors, so Merlin’s inclusion could boost demand for its stock and by that token increase its price.

Merlin share price

Merlin’s share price has performed strongly since the company’s IPO on November 7, hitting a post-IPO high of 359.50p on December 10, up 14 percent on the IPO price, and now heading for another peak. In today’s trading so far, Merlin’s stock has gained 0.9 percent to be at 358.25p as of 13:47 UTC. The FTSE 250 index had added 0.6 percent to that point in the day.

According to a survey of four analysts published by Analyst Ratings Network, Merlin has a consensus rating of ‘buy’ and an average target price of 369p. Two research analysts have a ‘buy’ rating on the stock, and two rate it a ‘hold’.

Merlin Entertainments, owner of popular attractions including Legoland, Madame Tussauds, and the London Eye, is the biggest visitor attraction operator in Europe and the second largest in the world after Disney. In total, Merlin has 99 assets in 22 countries across four continents, which last year pulled in more than 54 million visitors.

Other FTSE 250 additions

The other companies set to join the mid-cap index are Croda International (LON:CRDA), Vedanta Resources (LON:VED), Carphone Warehouse Group (LON:CPW), Grafton Group (LON:GFTU), Foxtons Group (LON:FOXT), Riverstone Energy (LON:RSE), and JD Sports Fashion (LON:JD). The changes will take place after market close on December 20 and take effect from the start of trading on December 23.

At that time also, Royal Mail (LON:RMG) and Ashtead Group (LON:AHT) will join the FTSE 100, displacing Croda International and Vedanta Resources.

As of 13:44 UTC buy Merlin shares at 358.25p.

As of 13:44 UTC sell Merlin shares at 358.00p.

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