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June 11, 2008
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ADNEC takes control of ExCeL London for £178m




Abu Dhabi National Exhibitions Company pslc (ADNEC) has been confirmed as the new owner of ExCeL London, after ADCG (UK) Ltd – owned by ADNEC – paid £178 million for all existing and issued share capital of the exhibition and conference complex owners LIECH (London International Exhibition Centre Holdings plc).

Once goodwill, cash in the bank and further assets are accounted for, the final consideration could be as much as £350 million. The ultimate source of funds in connection with the offer is the Government of Abu Dhabi.


ADNEC – the hub of an evolving global network

Irrevocable undertakings to accept the offer had already been made by holders of over 90% of LIECH shareholders, including Visionary Properties, current ExCeL chairman Lord King of Bridgwater, Reed Exhibition Companies Ltd, and Miller Freeman Worldwide.

It brings to fruition the beginning of ADNEC chairman, Sheikh Sultan Bin Tahnoon Al Nahyan`s vision, to establish a network of exhibition and conference centres around the world, in order to create a hardware super brand of international facilities with common standards for global exhibitions and conferences.

"This is a hugely exciting step for ADNEC," commented ADNEC chief executive Simon Horgan. "ADNEC`s strategy is to become the world`s leading provider of venues to the exhibtions industry. By developing a network of world-class venues, including those with the stature of ExCeL London, we will be able to serve the needs of an industry that is increasingly global in its outlook. ExCeL London will play a vital role in delivering ADNEC`s strategy and, in doing so, has a very bright future."

Prior to the deal being confirmed, Lord King, who steps down as chairman upon completion of the sale, but is retained as a non-executive director, said: "The offer from ADCG represents good value for LIECH shareholders, and exciting growth opportunities for the business. There is now the exciting prospect for ADCG and the ExCeL team to continue the further development of this important London destination."

It is indeed an exciting development for London, and also for future international destinations that become a part of the Sheikh and Simon Horgan`s network, since the establishment of superbrand venues within international destinations aligned with global event brands will consolidate both the hardware and software provider market positions. The marriage of the venue network to global industry event brands will create the potential for superleague partnerships, and seeing how rapidly ADNEC and the Sheikh have moved to establish their local and regional footprints in destinations like Abu Dhabi and London, confirms that the supernetwork could be up and running across the meeting and event capitals of the world within 10 years.

The business model deployed is to part or completely fund the exhibtion and convention centres via site land disposals to providers of hotel, office and entertainment support facilities. An example is currently on show in Abu Dhabi as ADNEC itself completes its own Phase Two at the expense of Capital Centre investors who themselves will boast nearly 4,000 hotel rooms, a fleet of retail, office and entertainment facilities, all within walking distance of the venue by this time next year. Phase Three of the venue will consist of the 33-floor iconic Hyatt hotel due to open in time for the Formula One Abu Dhabi Grand Prix.

Unsurprisingly, ExCeL itself still has land disposals to complete, and the working capital injected into the site`s development by the Sheikh will excite the new Mayor of London and send ripples of concern across the Midlands, Horgan`s former hunting ground where he was group commercial director of the NEC Group.

Ratification of the deal by shareholders is expected within two weeks.

Look out for James Latha's report from GIBTM at ADNEC coming shortly.

 


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