Sovereign wealth funds eye up Center Parcs

Sovereign wealth funds eye up Center Parcs

A number of sovereign wealth funds and private equity firms are reported to be circling the £2.5 billion domestic resort operator Center Parcs.

US buyout giant Blackstone, which has owned Center Parcs since 2006, is set to offload its stake this year after appointing Rothschild to sell or float the company.

Blackstone has invited some of the world’s largest investment funds to make an offer in recent weeks, in the hope of attracting a knockout bid before the general election, according to a Sunday Times report.

It will pursue a float in the second half of the year if offers do not match its expectations, insiders reportedly said.

The sale process has caught the eye of sovereign wealth funds, which are attracted to Center Parcs’ stable income and large property portfolio, they added.

City sources said the Abu Dhabi Investment Authority and Singapore sovereign wealth fund GIC were keen to team up with a private equity firm on a bid. Carlyle, the co-owner of RAC, was said to be among the private equity firms eyeing Center Parcs.

Private equity giants CVC, owner of Formula One racing, and BC Partners, the former owner of Phones 4U, are also working on bids for the company, sources said.

BC Partners teamed up with the state-backed fund Canada Pension Plan and had a £2 billion bid for Center Parcs rejected last year.

Bankers said Blackstone calculates that a float could value Center Parcs at £2.5 billion. One City banker said he believed bidders would struggle to match the price on offer from a lucrative London listing.

The operator has five sites in Bedfordshire, Cumbria, Nottinghamshire, Suffolk and Wiltshire.

According to its latest annual report, Center Parcs earned £147 million on 2013/14, up from £140 million in the previous 12 months. The pre-tax profits was up to £20.6 million from £18.6 million with an occupancy of 97.2%.

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