Birmingham NEC to be sold off in £300m deal

Birmingham City Council, which is continuing to grapple with a £1 billion equal pay settlement, announced it had found a buyer to take over the NEC Group, which owns some of the best-known conference and live music venues in the UK.

The purchaser LDC will take over in April with council leader Sir Albert Bore calling it a "landmark" deal, that would allow the business to go "from strength to strength".

Paul Thandi, the NEC Group's chief executive - who keeps his role as part of the deal - said it was "very good news for all concerned".

As well as the NEC, which hosts Crufts, the group also runs the Barclaycard Arena (formerly the National Indoor Arena), the Genting Arena - once the LG Arena - and the International Convention Centre.

In October 2012 at the Supreme Court, Birmingham City Council lost a case brought by thousands of female former workers including dinner ladies and cleaners, who had been paid less than men for work of equal value.

The decision landed the authority with a massive financial liability, which it is still paying off amid a background of Government-imposed cuts on councils nationally.

LDC, the private equity arm of Lloyds Banking Group, is buying the group's businesses in a deal involving the long-term 125-year lease of the NEC site, and 25-year leases on the ICC and Barclaycard Arena.

The city council will keep the freehold on all the NEC sites, while the agreement does not include any land on the site which may be needed for future development.

Under the deal existing use of all the venues and the Symphony Hall is protected, council bosses said.

Martin Draper, LDC's chief executive officer, said the company was "delighted" with the deal.

He added the firm would work with the city council "to support their plans at both the NEC and city centre sites which include the airport expansion, redevelopment of the Paradise Circus area, and in connection with the HS2 Project".

Mr Thandi said the NEC Group would now look at building on its existing businesses, and acquiring new companies although he was unable to put a figure on LDC's investment.

"There's a capital expenditure plan we have talked through and agreed with them (LDC), but in terms of numbers about what that investment would be hasn't been planned out yet - so it's a difficult question to answer," he said.

The council, announcing the decision to sell the NEC Group early in 2014, said at the time the sell-off would allow the business to grow, and denied it had been solely motivated by its huge equal pay bill.

Last year, having already disposed of £76 million worth of other land and property under a review of its asset sheet, it said the moves "should be seen in the context of the wider budget challenges faced by local authorities, including the financing of equal pay liabilities".

At the announcement, Sir Albert said: "The announcement of a new owner is a landmark moment in the history and development of the NEC Group and its three operating sites; NEC, ICC and Barclaycard Arena."

He added the deal would mean the NEC "continues to play a leading role in the wider economic development of the region while securing Birmingham and the wider West Midlands' position as the home for outstanding live events".