DIC set to sell Merlin stake

Dubai International Capital (DIC), the private-equity arm of the beleaguered state's sovereign wealth fund, is set to end its interest in London Eye and Legoland owner Merlin Entertainments.

DIC, which has a 20 per cent stake in the group, is expected to sell out when Merlin floats on the London Stock Exchange early next year. Blackstone, the US private-equity giant and primary shareholder, will slightly reduce its stake, while the family behind the Legoland group is considering increasing its share.

DIC's move is a surprise because Dorset-based Merlin's float is one of the most anticipated of 2010.

The business has been the poster child for the private-equity industry, as it has grown from just owning Sea Life Centres to being the second-biggest entertainment group in the world after Disney.

The move will fuel fears that Dubai-based investors are in need of cash, though DIC is generally regarded to have been far more resilient than Dubai World.