Center Parcs Owner Rejects £2bn Takeover Bid

The owner of Center Parcs has rebuffed a £2bn takeover bid for the leisure resort operator, Sky News can reveal.

BC Partners, a private equity firm, and the Canada Pension Plan (CPP) are understood to have made a joint approach to buy Center Parcs, which is owned by Blackstone, another major buyout group.

Blackstone is understood to have rejected the offer on the grounds that it undervalued Center Parcs, and is continuing to plan for a formal auction or stock market flotation of the company sometime next year.

Sky News revealed last month that Rothschild, the investment bank, had been hired by Blackstone to undertake a review of strategic options for the business, which it has owned since 2006.

The current owner is understood to believe that Center Parcs is worth well in excess of £2bn.

BC and CPP are expected to continue to work together on a potential takeover of the leisure group, which recently reported that its newest site in Woburn Forest was trading strongly.

The fifth village to open in the UK, it recorded a 99% occupancy rate during the three months since its launch, underlining the popularity of Center Parcs resorts and the potential for future growth.

Company insiders say Blackstone's period of ownership has enabled the creation of hundreds of jobs across the holiday village operator's locations, belying the stereotypical perception of private equity-backed businesses.

A source familiar with Rothschild's appointment said it was the logical bank to work on Center Parcs' future ownership prospects, having assisted with several refinancings of the business in 2006 and 2010.

Center Parcs recently kicked off discussions with tourism authorities in Ireland about constructing a resort there.

Profits at Center Parcs jumped by 10% to £20.6m in the year to April on sales up 4% to £314.6m.

The company is run by Martin Dalby, who became chief executive in 2000.

Among the options on which Rothschild will advise Blackstone and Center Parcs' board is a further refinancing that would enable shareholders to land a big payday ahead of a sale or stock market listing.

Center Parcs had a brief and not especially successful spell as a public company before being taken private by Blackstone in 2006.

Blackstone and BC Partners declined to comment.