May 23, 2005

Blackstone Acquires Merlin Entertainment

New York/London, May 23, 2005: The Blackstone Group today announced the acquisition of Merlin Entertainments and Merlin management, by Blackstone Capital Partners IV, an affiliate of The Blackstone Group, from Hermes Private Equity for £102.5m.

Merlin is one of Europe’s leading operators of branded visitor attractions under the Sea Life, Dungeons, Seal Sanctuary and Earth Explorer brands, and one of the most consistently successful. The company operates 28 visitor attractions in eight European countries and received more than 6 million visitors in the year ended February 2005.

The news follows one of Merlin’s most successful years to date in 2004 – contrary to many others in the sector - with visitor numbers up by over a million versus 2003 to 6.3 million; revenue up by 26% to £44.9million; and EBITDA up to £14.5 million – a 37% increase on 2003 (£10.6m).

Joseph Baratta, a Senior Managing Director of The Blackstone Group, said “We are very excited about having this opportunity to back Merlin in the further roll-out of its high quality brands across Europe. We also believe that the European attractions and theme-park sector will enter into a period of consolidation in the medium term and that Merlin is an excellent base from which to pursue follow on acquisition opportunities.”

“We also believe we have partnered with one of the best management teams in the sector led by CEO Nick Varney. Merlin has a clear growth strategy for the future, and we look forward to supporting Nick and his team in leading Merlin through its next stage of development.”

Nick Varney, Chief Executive of Merlin Entertainments, commented, “ Merlin Entertainments has experienced 5 years of consistent profit growth underlining our expertise in developing and managing branded attractions across borders. We would like to take this opportunity to both thank Hermes Private Equity for its support over the last 15 months; and to say how pleased we are to be working with Blackstone, an international leader in the private equity market, in the future. We certainly expect this dynamic growth to continue with Blackstone having already expressed strong commitment to our current strategy. We are therefore delighted to have been able to complete this deal. It is undoubtedly very positive news for everyone involved.

Justin Ward, a Hermes Private Equity Director said, “ We are delighted to have supported Merlin in a significant growth phase of the business which demonstrates the value of our strategy of backing high quality management teams.”

UBS Investment Bank acted as sole financial advisor on this transaction.

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About The Blackstone Group
The Blackstone Group, a private investment and advisory firm with offices in New York, Atlanta, Boston, London, Hamburg, Paris and Mumbai, was founded in 1985. The firm has raised a total of approximately $32 billion for alternative asset investing since its formation. Over $14 billion of that has been for private equity investing, including Blackstone Capital Partners IV, among the largest institutional private equity funds at $6.45 billion. In addition to Private Equity Investing, The Blackstone Group’s core businesses are Private Real Estate Investing, Corporate Debt Investing, Marketable Alternative Asset Management, Corporate Advisory, and Restructuring and Reorganization Advisory. www.blackstone.com