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.