The world’s largest property investor is close to clinching an £800m-plus takeover of the NEC Group, the live events complex which plays host to Crufts.
Sky News has learnt that Blackstone could strike a deal to buy the Birmingham-based complex as soon as Friday.
The deal will be one of the largest buyouts of a British company signed this year, and will come just weeks after Blackstone agreed a £1.4bn deal to buy Network Rail’s commercial property portfolio comprising thousands of premises under railway arches across the UK.
Its takeover of the NEC will, however, raise awkward questions for Birmingham City Council, which sold the company just three years ago for £307m.
While the group has been transformed since then through a series of small acquisitions, significant capital spending and performance improvements, the gulf in value is nevertheless a stark one, and could trigger suggestions that taxpayers were shortchanged in 2015.
Blackstone’s expertise as a property investor as well as its ownership of Clarion Events, an events and exhibitions group, is said to have given it an edge in the NEC auction against rival bidders, who included Centerbridge, Onex and TDR Capital.
Sources said on Thursday evening that Blackstone had agreed to pay “a little over £800m” for the business, which stages some of Britain’s most popular live events.
An announcement about the deal could also come before the weekend.
The result of the auction, which is being run by Bank of America Merrill Lynch, will capture a stunning return for LDC, the NEC’s current majority shareholder, and hand huge windfalls to a number of the Lloyds Banking Group-owned investor’s senior employees.
Martin Draper, LDC’s chief executive, is said to be in line for a payout of £30m or more, with the firm’s staff potentially reaping more than £100m in total, sources said.
Those windfalls may also raise questions given that when LDC bought the NEC, the bank was part-owned by British taxpayers.
The NEC is one of Britain’s biggest live events and exhibitions operators, and counts Birmingham’s National Exhibition Centre, the International Convention Centre and the Genting Arena among its assets.
Its venues stage popular events such as Crufts, the world’s most famous show for pedigree dogs, last summer’s Dinosaurs in the Wild exhibition and musicians including Ed Sheeran and Lady Gaga.
The NEC is also due to stage parts of the 2022 Commonwealth Games.
Paul Thandi, the company’s chief executive, has previously expressed an ambition “to build Disneyland in Birmingham”.
An LDC spokesman said recently: “Revenue and profit [at the NEC Group under LDC’s ownership] have increased significantly thanks to a number of transformational changes, new agreements with leisure operators, new sites and new exhibitions, and the business is well positioned for further growth.
“Like all private equity firms, our team invests in the companies we back, alongside our funding partner Lloyds Banking Group and the management teams we support.”
LDC has sought to play down comparisons between the business it bought in 2015 and the NEC as it is today, mindful of the potential political scrutiny that a sale may attract.
It has also established partnerships with leisure groups such as Merlin Entertainments, the owner of Legoland, in a successful effort to boost revenues and visitor numbers.
NEC Group’s transformation under LDC’s ownership was underlined during the summer when it reported a 2.8% rise in sales to £162.1m for the year to March, with profits in the same period up 9.8% to £54.7m.
As well as its live events venues, NEC owns The Ticket Factory, a ticketing agency, and Amadeus, a catering business.
The group has also expanded geographically, securing the contract to operate the refurbished Bradford Odeon as a major live events venue in the north of England.
In total, the group has more than 2,000 employees and boasts seven million visitors to its sites annually.
Blackstone declined to comment, while LDC could not be reached for comment.