UPDATE 2-Tussauds owner Merlin's shares valued at $5.6 bln in London debut
* Sold shares at 315 pence each, upper half of range
* Sale of 30 pct stake in company raised 957 mln pounds
* Stock opened 3.2 percent higher on London market debut
LONDON, Nov 8 (Reuters) - Shares in Merlin Entertainments rose more than 12 percent in debut trade on the London stock market on Friday to value the Madame Tussauds and amusement parks operator at around 3.5 billion pounds ($5.6 billion).
The shares opened up 3.2 percent at 325 pence and hit a high of 3.55 pence before settling back to change hands for around 343 pence by 0839 GMT.
The private equity-backed company, the world's second-largest visitor attractions operator behind Walt Disney Co, had originally set a range of 280p to 330p per share.
Merlin, which closed the offering early due to strong demand, said 87.5 percent of the sale had gone to institutional investors such as pension funds, while individual members of the public had received 12.5 percent of the shares.
A person familiar with the matter said the sale of a 30 percent stake was 9 times oversubscribed at the offer price.
Individuals who applied for the minimum 1,000 pounds worth of stock received 317 shares each, while those who applied for higher amounts were allocated the 317 shares plus 55 percent of the rest of their order up to a maximum of 8,872 shares.
Lots of institutional investors who put in orders received nothing, a source close to the deal said.
The offering raised total gross proceeds of 957 million pounds for the company and its selling shareholders, prior to an over-allotment option which could see the size of the offering increased by 10 percent if there is strong demand.
The net proceeds for the company totalled 165 million pounds, which will go towards reducing debt.
Its owners, private equity firms Blackstone Group and CVC, company directors and employees and the Danish investment firm Kirkbi A/S which controls Lego Group, all reduced their holdings.
Merlin put off plans for a listing in 2010 due to jittery markets, with shareholders instead selling a 28 percent stake to CVC. That sale valued the company, whose sites attracted more than 54 million visitors in 2012, at 2.25 billion pounds.
Merlin's 50-year-old chief executive Nick Varney, who owned around 1 percent of the company prior to the flotation, stands to bank just under 10 million pounds from selling almost a third of his stake in the offering.
Analysts at Numis, which was not involved in the sale but had estimated the company could be worth 360 pence per share, said the offer price represented a full-year 2014 EV/EBITDA multiple of 10.1 times.
That puts it at a discount to the average of UK leisure and consumer companies such as hotel and coffee shop operator Whitbread which have estimated 2014 EV/EBITDA of 12.1 times, and US theme parks such as Disney and SeaWorld which have an average forward EV/EBITDA ratio of 10.3 times.
Goldman Sachs and Barclays ran the sale and were joint bookrunners along with Citi and Morgan Stanley . According to Merlin's offer prospectus, the banks will receive a fee of 1.25 percent of the offer size as well as a possible additional 1 percent discretionary fee.