Lloyds Arm To Make An Exhibition Of NEC Group

An investment arm of the taxpayer-backed Lloyds Banking Group will this week take control of Birmingham's National Exhibition Centre as its local authority-owner raises cash to fund a £1bn-plus equal pay bill.

Sky News understands that LDC is close to striking a deal to acquire the NEC Group, which also includes the International Convention Centre and the National Indoor Arena - now known as the Barclaycard Arena.

The NEC is one of the UK's biggest exhibition spaces, hosting events such as the Classic Motor Show, Clothes Show Live and Crufts.

An announcement about the deal, which sources said could be worth in the region of between £250m and £300m, is expected to be made as soon as Wednesday.

The sale process was triggered by a cap on local authority borrowing and a High Court case dating back to 2012, which was brought by council-employed cleaners and dinner ladies who were pursuing the right to equal pay.

The NEC Group owns the Genting Arena, which now bears the name of a Malaysian gaming company following a previous sponsorship deal involving LG Electronics (KSE: 066570.KS - news) .

It also owns a national ticketing agency called The Ticket Factory; Amplify, a hospitality brand; and Amadeus, a catering operation.

LDC is understood to have seen off initial competition from other private equity funds including Providence Equity Partners.

It is unclear whether LDC will acquire the entire business or whether Birmingham City Council will remain a shareholder.

Announcing the planned sale last March, Sir Albert Bore, the council leader, said:

"A key purpose of the city council investing in establishing the NEC Group more than 30 years ago was to drive economic development and regeneration.

"This has been achieved, but now the NEC Group has reached a point in its evolution where it needs to be able to adopt the financial disciplines of a private, rather than a council-owned company to enable the next stage of strategic development.

More recently, the Council confirmed that talks were underway with an unidentified preferred bidder.

LDC and the NEC Group declined to comment.