Merlin Entertainments is reportedly set to announce profits of £350m when it presents its annual results on Wednesday, paving the way for a £3.5bn market flotation.

According to The Telegraph, Merlin is one of the biggest IPO prospects of the next 12 months and is currently deciding whether to float in London or New York.

US-based investment firm Blackstone Group acquired a majority share in the company in 2005 as a platform to make further acquisitions in the European attractions market in a deal worth £102.5m.

However, the company will reportedly tell fund managers and City analysts on Wednesday that it has now shifted its focus to Asia and the US.

Blackstone Group shares ownership with CVC and Kirkbi.

Merlin is the second largest attractions operator in the world after Disney and owns brands such as Madame Tussauds, Legoland, Sea Life, Alton Towers and Gardaland.

Merlin chief executive Nick Varney announced plans to float the company on the London Stock Exchange as early as 2007.

Several indications have been made since that an IPO was imminent but these have been delayed each time due to the poor economic climate.