The owner of Center Parcs is racing to fashion a consortium out of the remaining bidders for the holiday resort company after a final bid deadline passed without any formal offers being made, according to people familiar with the matter.
Canadian private equity group Brookfield put Center Parcs up for sale earlier this year, aiming for a valuation of about £4 billion (€4.6 billion) for the upmarket chain, for which it paid £2.4bn in 2015.
Any deal was not expected to lead to any job losses at its Longford facility or hinder its planned €100 million expansion there.
While Center Parcs has continued to perform strongly, the sale has been seen as test of a potential buyer’s willingness to make a significant bet amid the economic pressures facing the UK, where most of its business is located, and higher interest rates that have hit the buyout industry.
The three remaining bidders – GIC, the Singaporean sovereign wealth fund; and private equity groups Antin Infrastructure Partners and KSL Capital Partners – were scheduled to submit second-round bids by the end of July.
However, no formal offers have been made, according to people close to the sale process, as bidders remain wary given the risks of an economic downturn. The bidders have concerns over how much potential growth there is left in the business, the people added.
In an effort to secure a sale, advisers to Brookfield are trying to construct a consortium from the bidders to spread the hefty cost of a deal. Barclays, Bank of America and Eastdil Secured are advising Brookfield.
The sales process, known as ‘Project Redwood’, drew interest from private equity giants CVC, EQT and Blackstone, which sold the business to Brookfield in 2015, but the firms dropped out earlier in the auction.
If Center Parcs were sold, it would be by some distance the biggest deal in the UK hospitality sector this year, defying the wider downturn in dealmaking.
People close to Brookfield still believe a sale could be sealed in the coming weeks. The Canadian group may still opt to offload a minority stake to a single bidder or also hang on to the business which has delivered the firm returns through a series of dividend payouts, one of the people said.
Center Parcs has not just piqued interest because of its popularity with its 2.1 million guests each year – the operator reported occupancy rates of 97.1 per cent across its six holiday parks in Britain and Ireland in the year to the end of April. It also has significant property assets.
The group holds leaseholds of between 73 and 999 years on each of its 400-acre woodland sites, which are cumulatively valued in excess of £4 billion, according to its latest company accounts.
Brookfield, GIC Antin and KSL declined to comment. – Copyright The Financial Times Limited 2023
