Talks underway for £300m+ Butlin’s sale to former owners

UK: Talks are underway to sell Butlin’s back to the family that previously owned the seaside resort chain as the domestic holiday sector continues to attract investor interest off the back of a summer bookings boom.

According to Sky News, the Harris family, which co-founded Bourne Leisure in the 1960s, is preparing to offer more than £300 million to buy back the operating business of Butlin’s, just a year and a half after they sold the Bourne Leisure portfolio to US-based private equity firm Blackstone for a reported £3 billion.

Bourne Leisure originally bought Butlin’s in 2000 and the Harris family retained a minority stake in the Bourne chain once the Blackstone deal went through early last year.

It is reported that any potential deal could be concluded by the end of August at the earliest.

Last month, private pension fund Universities Superannuation Scheme announced that it was buying Butlin’s underlying real estate assets in a £300 million transaction.

Founded in 1936 by Billy Butlin, Butlin’s’ fortunes have fluctuated in recent years. In its pomp, Butlin’s operated nine sites across the UK and attracted around a million holidaymakers on an annual basis, whereas it now manages three sites in Bognor Regis, Minehead in Somerset, and Skegness in Lincolnshire.

However, the sector has been boosted by another unprecedented summer of bookings, with many families and groups looking to travel domestically once again for their holidays as the reality of the cost of living crisis bites and uncertainty lingers over disruption to international travel plans.

That, in turn, has attracted a raft of private equity and real estate investors to the British domestic holiday market. Among those linked with a swoop for Butlin’s earlier this year included Terra Firma Capital Partners, Queensgate, Bain Capital, Epiris and TDR Capital.

Meanwhile, US-based real estate investment trust Sun Communities bought UK holiday park operators Park Holidays UK and Park Leisure for £950 million and £182 million respectively, and private equity firm CVC Capital Partners bought a majority stake in Away Resorts for £250 million. Last August, Away Resorts merged with Aria Resorts to create a combined ‘staycation powerhouse’ to further capitalise on the domestic travel boom.

That investor interest undoubtedly remains, although volatile market conditions have made it harder to secure large quantities of debt financing, according to Sky News.

Holiday park group Parkdean Resorts, regarded as the largest UK operator of holiday parks, campsites and glamping sites, caravan parks, lodges and cabins, was put up for sale in 2021 by Canadian investment firm Onex Corporation, which purchased the company in 2016 for a fee in the region of £1.35 billion. Despite rumoured interest from Blackstone, a prospective sale fell through two months after a six-month auction came to nothing.

Investment bank Rothschild is handling the sale of Butlin’s.