What has Blackstone (NYSE: BX) been doing with all those theme parks it's been buying? Well, the answer is becoming a bit clearer now. The private equity firm is getting ready to take theme park operator Merlin Entertainments public early next year.

Several investment banks have already been called to advise on the transaction, including Citigroup (NYSE: C), Goldman Sachs (NYSE: GS), Deutsche Bank (NYSE: DB), UBS (NYSE: UBS), and Nomura (NYSE: NMR). If all goes as planned, the deal could be good for $3.33 billion.

As I

As Sarah Gilbert posted this evening, Blackstone priced its IPO at the top of the range, $31 a unit. It's worth emphasizing that people who buy these units will not be getting shares of stock -- not at all. Instead they'll receive master limited partnership units.

And as I discussed this afternoon on CNBC with Maria Bartiromo, the value of these units is likely to skyrocket tomorrow when they begin trading on the New York Stock Exchange. The reason is that the offering is seven times oversubscribed -- that means that orders for Blackstone's units exceed supply by a factor of seven!

I will go out on a limb here and predict that these Blackstone units will end the day at $90 a unit. This will leave Steven Schwarzman in the enviable position of having a net worth of roughly $23 billion. Not bad for a day's work. No wonder KKR wants to do an IPO.

Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.

This morning's Wall Street Journal [subscription] scored a coup -- an exclusive interview with Blackstone Group's (prospective trading symbol BX) CEO Steve Schwarzman.

The interview's theme -- that Schwarzman is the private equity industry's answer to Napoleon -- did not delve into the question of whether it makes sense to invest in what Schwarzman is selling to the public. But it did include some fascinating personal details:

• At 5' 6" he is a "little man" who wants to "inflict pain" on and "kill off" his rivals;
• He noticed that one of the servants at his 11,000 square foot Palm Beach mansion wore squeaky rubber soled shoes;
• He ate $400 worth of stone crabs there during his 15 minute lunches; and
• He neglected to invite his rival -- KKR partner, Henry Kravis-- to his lavish 60th birthday celebration -- to which a huge portrait of Schwarzman, which usually hangs in his living room, was shipped -- because he had never been invited to Kravis's home.

Should you invest with him? Yes. However, the securities he's selling in the Blackstone IPO will not enable you to do so. I have been plowing through its prospectus and have come to the conclusion that you should avoid these securities. Here's why:

Goldman Sachs Group Inc. (NYSE:GS) is planning to raise $19 billion to $20 billion for the largest corporate buyout fund ever.

This isn't a total shock. As Reuters points out, rival bankers have argued that Goldman was excluded from the Blackstone Group IPO because it's viewed as too much of a competitor. Goldman Chief Executive Lloyd Blankfein disputes this characterization.

Last month, Goldman joined forces with Kohlberg Kravis Roberts & Co. and Texas Pacific Group for the $45 billion TXU buyout, the largest ever.

Buyout funds are surging in popularity because of the growing demand by large investors for alternatives to stocks and bonds

But this is far from a sure thing.

``They have been leaders in identifying new trends and clearly this is where they feel their profit margins have the most growth opportunity,'' said Financial Advisory Service portfolio manager Douglas Ciocca told Bloomberg News. ``But this is risky if it decreases their liquidity.''

It will be interesting to watch to see how private equity firms and rivals on Wall Street react to Goldman's move.

Meanwhile, I bet hotel rooms are booking up fast near Goldman's headquarters in New York from companies both large and small eager to be acquired.

Even though private equity firms have been around since the 1970s, there haven't been any IPOs of these outfits -- at least not until recently. In fact, back in the late 1980s, private equity was red hot . Yet, there were still no IPOs.

But, the recent IPO of Fortress Group (NYSE:FIG) has changed everything. There is no doubt that the public markets have a big appetite for these kinds of issues. The big question: Is this really a sign of selling at the top?

That's the tone in a front page article in yesterday's Wall Street Journal regarding the anticipated IPO of Blackstone [the WSJ is a paid service]. Keep in mind that the most successful private equity operators have a pretty good sense for timing. That's why they make the big bucks. Then again, there is still lots of momentum in private equity -- and tons of money coming into funds. This should continue to for awhile.

The interesting thing is that a credit crunch would be a good thing for a Blackstone IPO. It will have billions of its own capital to finance its deals -- and could even use its stock. This would certainly give the firm a big competitive advantage.

So, it's no wonder that Blackstone is spending 24/7 to get this deal done.

• March 22, 2007: Blackstone files for IPO
• March 22, 2007: But CEO called public markets 'overrated'?
• May 16, 2007: AFL-CIO objects to Blackstone IPO
• June 13, 2007: Should you invest in Blackstone IPO?
• June 19, 2007: Blackstone IPO prices Thursday, June 20; offered to public Friday, June 21
  
• June 21, 2007: Blackstone IPO no good for private investors
• June 21, 2007: Blackstone IPO priced at $31/share, sets BX value at $33.6 billion
• June 22, 2007: Blackstone opens 18% higher in NYSE debut