Holiday camp chain Butlin’s to be put up for sale amid staycations boom
The owner of Butlin’s is preparing to put it up for sale amid a boom in British staycations, sparking a potential bidding frenzy for the country’s best-known chain of holiday camps.
Sky News has learnt that Bourne Leisure, which also owns Haven and Warner Leisure Hotels, recently picked investment bankers to conduct an auction of Butlin’s next year.
The move comes less than 12 months since privately owned Bourne Leisure sold a majority stake to Blackstone, the private equity giant, in a deal valuing the group at about £3bn.
Butlin’s likely valuation in a sale was unclear this weekend, but bankers and private equity investors said there would be “a deluge” of interest in acquiring the brand and its three sites.
The chain was established in 1936 by Billy Butlin, who – according to its official history – “felt sorry for families staying in drab guest-houses with nothing much to do” during a trip to Barry Island.
He acquired a plot of land in Skegness, Lincolnshire, and opened the first eponymous resort, which is among the three that still trade today.
In its heyday, Butlin’s operated from nine sites across the UK, entertaining a million holidaymakers each year with knobbly knees competitions and glamorous granny contests.
Hundreds of staff across its resorts became known as Redcoats.
The brand became such an entrenched part of Britain’s popular consciousness that it provided the inspiration for Hi-de-Hi!, the long-running BBC sitcom.
Its fortunes waned with the explosive growth of opportunities for Britons to holiday abroad, but has enjoyed something of a resurgence in recent times.
Butlin’s other sites today are at Minehead in Somerset and Bognor Regis, the traditional seaside town close to the South Downs National Park.
The pandemic has triggered rapid growth in the number of staycations, paving the way for a string of deals in the sector.
Earlier this month, Sun Communities, a New York-listed real estate investment trust, paid £950m for Park Holidays, substantial exceeding its owners’ initial price expectations.
The Canadian owner of Parkdean Resorts, a bigger rival to Park Holidays by number of sites, has instructed bankers at Morgan Stanley to prepare a review of options that most observers expect to result in a sale next year.
Butlin’s likely valuation in a sale was unclear this weekend, but bankers and private equity investors said there would be ‘a deluge’ of interest
Other recent deals in the sector have included the private equity firm CVC Capital Partners buying Away Resorts – the owner of well-known holiday parks such as Whitecliff Bay on the Isle of Wight and Sandy Balls in the New Forest.
CVC subsequently combined Away Resorts with Aria, another operator.
Bourne Leisure, which is run by chief executive Paul Flaum, is said to have decided that Butlin’s is sub-scale and therefore non-core to its growth plans.
Rothschild is understood to have been retained by Blackstone and Bourne to oversee the Butlin’s sale.
The sector’s other big players are expected to explore offers for Butlin’s, although it may end up being sold on a standalone basis to a financial buyer.
Blackstone declined to comment on Saturday.
Consumer rights group Which? is suing Apple for £3bn over the way it deploys the iCloud.
If the lawsuit succeeds, around 40 million Apple customers in the UK could be entitled to a payout.
The lawsuit claims Apple, which controls iOS operating systems, has breached UK competition law by giving its iCloud storage preferential treatment, effectively “trapping” customers with Apple devices into using it.
It also claims the company overcharged those customers by stifling competition.
The rights group alleges Apple encouraged users to sign up to iCloud for storage of photos, videos and other data while simultaneously making it difficult to use alternative providers.
Which? says Apple doesn’t allow customers to store or back-up all of their phone’s data with a third-party provider, arguing this violates competition law.
The consumer rights group says once iOS users have signed up to iCloud, they then have to pay for the service once their photos, notes, messages and other data go over the free 5GB limit.
“By bringing this claim, Which? is showing big corporations like Apple that they cannot rip off UK consumers without facing repercussions,” said Which?’s chief executive Anabel Hoult.
“Taking this legal action means we can help consumers to get the redress that they are owed, deter similar behaviour in the future and create a better, more competitive market.”
Apple ‘rejects’ claims and will defend itself
Apple “rejects” the idea its customers are tied to using iCloud and told Sky News it would “vigorously” defend itself.
“Apple believes in providing our customers with choices,” a spokesperson said.
“Our users are not required to use iCloud, and many rely on a wide range of third-party alternatives for data storage. In addition, we work hard to make data transfer as easy as possible – whether it’s to iCloud or another service.
“We reject any suggestion that our iCloud practices are anti-competitive and will vigorously defend against any legal claim otherwise.”
It also said nearly half of its customers don’t use iCloud and its pricing is inline with other cloud storage providers.
Keep up with all the latest news from the UK and around the world by following Sky News
How much could UK Apple customers receive if lawsuit succeeds?
The lawsuit will represent all UK Apple customers that have used iCloud services since 1 October 2015 – any that don’t want to be included will need to opt out.
However, if consumers live abroad but are otherwise eligible – for example because they lived in UK and used the iCloud but then moved away – they can also opt in.
The consumer rights group estimates that individual consumers could be owed an average of £70, depending on how long they have been paying for the services during that period.
Apple is facing a similar lawsuit in the US, where the US Department of Justice is accusing the company of locking down its iPhone ecosystem to build a monopoly.
Apple said the lawsuit is “wrong on the facts and the law” and that it will vigorously defend against it.
Read more from climate, science and tech:
The almighty row over climate cash that’s about to boil over
Oil state Azerbaijan is ‘perfectly suited’ to hosting a climate summit, says Azerbaijan
Big tech’s battles
This is the latest in a line of challenges big tech companies like Apple, Google and Samsung have faced around anti-competitive practices.
Most notably, a landmark case in the US earlier this year saw a judge rule that Google holds an illegal monopoly over the internet search market.
The company is now facing a second antitrust lawsuit, and may be forced to break up parts of its business.
Read more: Google faces threat of being broken up
File pic: Reuters
And in December last year, a judge declared Google’s Android app store a monopoly in a case brought by a private gaming company.
“Now that five companies control the whole of the internet economy, there’s a real need for people to fight back and to really put pressure on the government,” William Fitzgerald, from tech campaigning organisation The Worker Agency, told Sky News.
William Fitzgerald at Lisbon’s Web Summit, where he spoke to Sky News
“That’s why we have governments; to hold corporations accountable, to actually enforce laws.”
P&O Ferries spent more than £47m summarily sacking hundreds of seafarers in 2022, helping it cut losses by more than £125m and putting it on a path to profitability, according to accounts due to be published in the coming days.
The dismissal of 786 mainly British seafarers, and their replacement with largely non-European agency staff earning as little as £4.87 an hour, was hugely controversial, drawing criticism from across the political spectrum and threats of a consumer boycott.
The controversy was rekindled last month when Sky News revealed that DP World, P&O‘s Dubai-based parent, considered withdrawing a £1bn investment at its London Gateway port following criticism of P&O by the Transport Secretary Louise Haigh.
Read more: Why P&O Ferries’ pariah status may never change
Please use Chrome browser for a more accessible video player
Chancellor quizzed over P&O ferries
P&O has always maintained the restructuring was necessary to allow it to compete with its rivals on cross-Channel routes, and prevent a total collapse of the company with the loss of more than 2,000 jobs.
In financial statements for P&O Holdings, filed 11 months late and seen by Sky News, the company says the restructuring cost £47.4m including legal fees and consultants, allowing it to cut the overall wage and salary bill by £21.3m.
In a note accompanying the accounts submitted to Companies House, P&O’s directors describe the restructuring as part of a “transformational journey” that will help it return to recording a profit before tax this year.
“The business has been on a transformational journey as it has recovered from the challenges of the global pandemic, Brexit and the impact of disruption caused by the change in the crewing model,” the directors say.
“The group believes that the transformational actions that commenced in 2022 and continue through into 2024 will equip the business to grow profitably when demand rises in the coming years.”
Read more:
Boss admits he couldn’t live on wage his staff are paid
Fury as firm behind sackings given major freeport role
Brexit and COVID financial distress
The accounts reveal the financial distress in which P&O found itself in 2022.
Having recorded losses of £375m the previous year as it struggled to recover from the pandemic-era decline in passenger numbers and post-Brexit complications, it was in breach of its covenants to external lenders underwriting the construction of new hybrid cross-Channel ferries.
Despite the restructuring costs, revenue increased by £83.3m to £918m in the financial year, but the company still recorded a loss of £249m and was reliant on loans totalling £365m from parent company DP World to remain a going concern.
An additional £70m was made available this year, with 4.5% interest rolled up and not requiring any repayment until 2028 at the earliest.
Keep up with all the latest news from the UK and around the world by following Sky News
The financial statements also reveal that P&O was forced to sell one of the new cross-Channel ferries to a French subsidiary to pay off an external financing loan of £76.9m, and then lease the vessel back from its ultimate owner.
In a statement, P&O Ferries said: “Our 2022 financial accounts show the challenges faced by the business at that time, and why the business needed to transform into a competitive operator with a sustainable long-term future.
“P&O Ferries has taken steps to adjust to new market conditions, matching our capacity to demand, and adopting a more flexible operating model that enables us to better serve our customers.”
-
Sports2 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports7 months agoStory injured on diving stop, exits Red Sox game
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Environment1 year agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Sports3 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business2 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway