Private equity firm Blackstone is preparing to float theme park operator Merlin Entertainments next year, hoping to take advantage of buoyant equity markets, a source familiar with the situation said.

The U.S. buyout house has called in Citigroup , Goldman Sachs , Deutsche Bank , UBS and Nomura <8604.T> to advise on the initial public offering, which could value the business at around 2 billion pounds ($3.33 billion) and come early in 2010, the source said.

Merlin is the world's second largest theme park operator after Disney, owning the London Eye, Madame Tussauds and the Sea Life centers. Dubai International Capital (DIC) also owns 20 percent of the business.

Blackstone and DIC declined to comment.

As equity markets have stabilized, private equity firms have started to line up better-performing businesses for possible flotation in order to realize some cash from their investments.

Blackstone Chief Executive Steve Schwarzman said earlier this month the firm was evaluating the possibility of seven IPOs in addition to one -- Team Health -- already filed.

Blackstone is expected to remain a majority shareholder in the business after the float, with much of the capital going to finance new attractions, the source said.

(Reporting by Simon Meads; editing by Patrick Graham)