* Looking at possible float in London, New York
* Would not float before summer, not yet appointed banks
* Operating profit rose 16.5 pct for year to Dec. 29
* Proceeds to pay down debt, fund expansion in U.S., Asia
LONDON, March 27 (Reuters) - Merlin Entertainments Group, the private-equity backed owner of Madame Tussauds and Legoland, is preparing to go public in either London or New York and has been meeting with potential investors, its chief executive said on Wednesday.
The world's second largest visitor attraction operator behind Walt Disney, had revenue of over one billion pounds for the year to Dec. 29 2012, and was valued at 2.25 billion pounds ($3.41 billion) in 2010 when private equity firm CVC Capital Partners bought a stake.
"We are definitely now considering our options," Chief Executive Nick Varney told Reuters, adding a sale would allow it to pay down debt of 1.27 billion pounds as at the end of December, and help fund expansion in the U.S and Asia.
The company said as part of any IPO it would consider bringing its leverage level down below 3 times earnings before interest, taxation, depreciation and amortisation from a current multiple of 3.6 times.
Merlin, owned by the Danish investment company Kirkbi A/S that controls Lego Group, and private equity firms Blackstone Group and CVC, put off plans for a listing in 2010 due to jittery markets.
After years of subdued activity, European initial public offerings (IPO) have picked up over the last few months as improving stock markets boost investor confidence.
Last week, British insurer esure, estate agent Countrywide and wind farm investment fund Greencoat UK Wind raised a combined total of more than 1 billion pounds ($1.52 billion) from selling their shares in London.
PREPARING THE GROUND
With the summer months being Merlin's key trading period, Varney said the group would likely make a decision towards the end of summer, with a float possible in late 2013 or early 2014.
"We've been putting a lot of work into preparing the ground and making sure that if we do (IPO) ... we can move relatively quickly and with people knowing and feeling comfortable about what they are dealing with."
Varney said the company, which currently earns 20 percent of its revenue in the U.S., would prefer to list in London, but was also considering New York. He declined to comment on how much Merlin might be worth.
Walt Disney shares trade at 16.4 times prospective earnings for 2013.
Late last year Seaworld Parks and Entertainment, also backed by U.S. private equity company Blackstone, filed with U.S. regulators for an initial public offering.
On Wednesday Merlin reported a 16.5 percent rise in operating profit to 258 million pounds for the year to Dec. 29, as expansion in the U.S. and Asian markets helped mitigate the impact of the euro zone crisis, wet weather and London Olympics.
The group opened seven new attractions in 2012, taking it to almost 100 over four continents, and will open another six this year including a Sea Life centre in Manchester, England and Legoland discovery centre in New York.
A listing would likely include some new shares to help pay down debt, but the bulk would come from existing shareholders reducing their stakes, chief financial officer Andrew Carr said.
Kirkbi has a 36 percent stake, while Blackstone and CVC have 34 percent and 28 percent respectively.
Merlin had hired Citigroup, Goldman Sachs, Deutsche Bank, UBS and Nomura as advisers in 2010 before abandoning its plan.
"It's good that the market seems to be opening again, it's been closed for a long time, there does seem to be a lot of appetite," said Varney, adding that it had not yet appointed banks.