Another leisurely deal for Blackstone in UK

Giant alternative asset manager Blackstone Group has flexed its muscles on both sides of the pond. In the UK, it has agreed to buy Center Parcs, a quoted short breaks holiday company, for 80p per share as part of a move to expand in property and leisure activities.

The price offered through the Forest Bidco vehicle values the target company’s equity at £205.4m (US$356.6m), excluding net debt of £61.3m as at October 6, and is a 16% premium to Center Parcs’ closing price of 69p on March 8. The offer is a 26% premium to Center Parcs’ six-month average trading price before recent market speculation surfaced about a takeover approach.

Blackstone’s offer has been accepted by the directors, which were advised by UBS and KPMG Corporate Finance, who control 3.9m shares, or 1.5% of the register. The company said it accepted the offer as current trading conditions were difficult and the “challenging” environment would remain in the short to medium term.

Other shareholders, including fund managers F&C and Rathbone with a combined 31m shares, have also given irrevocable undertakings to accept the bid unless a higher offer of 82p and 85p per share, respectively, was received.

Joseph Baratta, a senior managing director at Blackstone, said: “Blackstone intends to fund the significant incremental capital investment that Center Parcs requires.”

Center Parcs owns and operates four holiday “villages” in the UK and is applying for planning permission for a fifth. It has also expanded into managing other similar businesses, and just before Christmas won the operating contract of Les Jardins de la Mer, a waterfront apartment and leisure complex to be built on Jersey.

In its interim results for the 24 weeks to October 6 last year, Center Parcs posted revenues of £113.5m, only £300,000 more than in the same period of 2004, with earnings before interest, tax, depreciation and amortisation of £19.6m, up from £17.9m.

Blackstone has been snapping up hotel and leisure assets around the world, including Legoland and Merlin in the UK last year.

Rothschild advised Blackstone, with Barclays Bank providing the debt to support the deal.