LONDON (Reuters) – Private equity house Blackstone (BX.N) is in talks to sell Center Parcs’ UK property assets for more than 1 billion pounds ($1.5 billion) in a deal worth about five times what it paid for the holiday resort operator in 2006.
Sources familiar with the matter said Blackstone was in the process of setting up a fund with Prudential-owned fund management house M&G (PRU.L) to hold Center Parcs’ four UK sites, which are valued at about 1.4 billion pounds.
M&G is expected to buy the majority stake in the fund, while Blackstone will retain control of the operating business and keep a stake of up to 25 percent, one of the sources said.
Holiday parks in the Netherlands, Belgium, France and Germany will not be sold into the fund.
M&G and Blackstone declined to comment.
Blackstone took over Center Parcs four years ago and has since then invested heavily in refurbishments that have improved operating margins and boosted EBITDAR growth to almost 50 percent to date, its website said.
Center Parcs’ woodland villages have become popular short-break destinations for middle-class British families, but more recently, the company has attracted additional custom from holidaymakers who have scrapped overseas travel plans due to the weakness of the pound. (Reporting by Sinead Cruise and Caroline Copley; Editing by Andrew Macdonald) ($1=.6783 Pound) (See www.reutersrealestate.com for the global service for real estate professionals from Reuters)