Review launched into 2015 sale of NEC Group

Arena Birmingham

Birmingham City Council is to launch a review into the 2015 sale of the NEC Group for £307m, weeks after the business was sold on for a reported £800m.

American private equity group Blackstone sealed a deal for the live entertainments business last month after a competitive bidding process.

Council leader Cllr Ian Ward said the review will seek to establish “that the sale number when the council sold the business was in fact the correct number and value for money”.

There had been criticism the council only included a limited anti-embarassment clause when it sold the business to LDC. This meant that it had no clawback when it was subsequently sold for a much higher amount.

However during the sale process NEC bosses sought to assert its message about how the business had been transformed under LDC’s ownership.

Speaking days before the Blackstone deal was confirmed, Kathryn James, NEC Group’s Conventions and Exhibitions managing director, acknowledged “some sensitivity” about the difference between the 2015 and 2018 valuations but highlighted the £48m of investment over a three-year period.

And this week it has revealed the next phase of its growth plans, with ambitions to convert the campus site into NEC City. The 15-year plan could see the creation of 315,000 sq metres of new floorspace, 10,000 jobs, and up to 2,000 apartments.

Cllr Ward also highlighted the scale of investment by the business in response to questions from Conservative councillor Alex Yip about the review of the 2015 deal.

He said: “One of the reasons we sold the NEC was to enable it to grow and to grow at a pace that it wouldn’t be able to do if it remained owned by the city council.

“What we have seen since the sale of the NEC is that is precisely what has happened. There have been some £50m of capital investment made out at the NEC site in Solihull.

“It’s very unlikely that if the business had remained within the ownership of the council that that capital investment would have been made – and that capital investment is one of the reasons why we have seen this new valuation on the resale of the NEC.”

NEC Group includes five Birmingham venues – the National Exhibition Centre (NEC), International Convention Centre (ICC), Arena Birmingham, Resorts World and Genting Arena, and the Vox Conference Centre – and it also operates ticketing agency The Ticket Factory, hospitality brand Amplify, caterering business Amadeus and sponsorship consultancy NEC Connect Group.

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