Birmingham City Council has officially announced it is to seek offers for the NEC Group. The announcement follows the conclusion of a strategic review.
A press statement said principal objectives of the proposed sale were to secure an investor who shares the vision and strategic ambitions of the NEC Group and to maximise the proceeds for the City Council.
“Bringing the NEC Group under private ownership will enable the business to take full advantage of its growth opportunities and reach the next stage of its development,” the statement said.
The NEC Group delivers an economic impact of over £2bn per year to the West Midlands economy and supports some 29,000 full-time equivalent jobs in the region.
The NEC Group recently secured £140m worth of investment into its Resorts World Birmingham project by Genting UK.
The City Council will invite potentially interested buyers to participate in a pre-qualification process while sale preparations are finalised.
In structuring a transaction, the City Council said it intended to ensure that the existing uses of the exhibition centre, International Convention Centre and two arenas (LG Arena and National Indoor Arena) are preserved. “This will secure the profile of Birmingham and the broader West Midlands as a world-class home of a broad array of live events,” the City Council statement said.
The City Council also intends to retain claw-back rights over certain land at the main NEC site, so ensuring that it preserves potential future development value from a highly attractive site that will be adjacent to the Birmingham Interchange HS2 station.
Since the opening of the National Exhibition Centre in 1976, with seed-corn investment from the City Council, the NEC Group has broadened its business and through the subsequent openings of the NEC Arena (1980), the International Convention Centre (1991) and the National Indoor Arena (1991), the Group has evolved into one of the world’s leading venue management companies.
In addition to its venues, the NEC Group has established a number of related businesses including a national ticketing agency (The Ticket Factory), a catering business (Amadeus) and NEC Group International, which is taking its venue management expertise into the operation of third party-owned venues.
“A private sector owner is likely to have greater appetite to invest more capital in these businesses, and to be able to support the growth of the NEC Group internationally,” the statement added.
The City Council said the NEC Group had already shown its ability to attract private sector investment through its partnerships with LG, Barclaycard and Genting UK, but believes that further investment is required to accelerate its development.
Sir Albert Bore (pictured), Leader of Birmingham City Council, said: “A key purpose of the City Council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration.
“This has been achieved, but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned company to enable the next stage of strategic development. In doing so, economic impact and job creation can be preserved and enhanced.
“An open sale process has been identified through an extensive strategic review process as the way to achieve full value for this internationally-renowned asset, whilst achieving the other principal objectives of enabling the Group to achieve its potential and growing economic impact.”
Martin Angle, Chairman of the NEC Group, added: “The NEC Group comprises four of the best-known and most well-established venues in the UK, located at the heart of England and boasting unrivalled accessibility by all modes of transport. The Group has weathered the challenging economic environment and has a clear vision for its future growth.
“We look forward to working with Birmingham City Council in preparing the NEC Group for this major step forward and believe that its iconic status and portfolio of venues and businesses is likely to attract strong interest from potential buyers, from both the UK and overseas.”
Birmingham City Council and the NEC Group have retained Gleacher Shacklock LLP as financial advisers and Wragge & Co LLP as legal advisers in relation to the sale process.
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