Merlin's record profits pave way for £3.5bn IPO Merlin's chief executive, Nick Varney, has always insisted his natural preference would be to have the company remain based in the UK with a London listing - even in the face of investor resistance. There was a lot of bad blood between investors and private equity and we have been trying hard to tackle that criticism. We are trying to get people familiar with Merlin so that when we press the button we do it the right way," Mr Varney said. The recent spate of successful London IPOs, such as Esure, Crest Nicholson, and Countrywide, have increased the chances of a UK float for Merlin and encouraged investors about the prospects of a private equity deal. Sellers have also become more confident about valuations after seeing companies" share prices rise since listing, with Crest Nicholson's lifting 24pc. According to research from Dealogic, IPO volumes across Europe have climbed to $4.9bn so far this year, up 64pc on the same period last year. "It is incredibly encouraging to see what's been happening," said Mr Varney. Because the market has been closed for a long time, which is not good for companies or the London market. The change in sentiment has encouraged a wave of companies to gear up for potential stock market debuts, including HellermanTyton, the industrial cable company; and Partnership Assurance, the specialist insurer. Other non-private equity floats such as Royal Mail and Santander UK, as well as the smaller Hastings Insurance are also keeping the market busy. In 2010, Merlin was one of a group of buy-out backed companies forced to scrap its IPO because of the economic climate. Instead, Blackstone, which owns the majority stake, sold a 28pc stake to CVC for about £330m, valuing the group at £2.25bn. The double-digit growth achieved oversees, Merlin is expected to win over institutional supporters at a time when the UK economy has very limited growth. Last year, despite taking a hit from bad UK weather and the Olympics, Merlin's Asian acquisition trail helped lift both earnings and top-line growth. "No one else is quite doing what we are doing: the direction of travel is pretty clear," said Mr Varney.