Earls Court gets decked out for flotation

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The Independent Online

Earls Court & Olympia Group, owner of the eponymous exhibition centres in west London, is heading towards a stock market flotation.

The move would mark a remarkable turnaround for the centres that, while under the control of P&O three years ago, were regarded as outdated and shabby.

Earls Court & Olympia's board agreed last month to press forward with a London listing which would see the company valued at over £500m. The business is 60 per cent owned by venture capital group Candover and run by Andrew Morris, the second youngest of five brothers fronting a bid to buy the centres for £183m in 1999.

Earls Court & Olympia's board, chaired by former IPC boss David Arculus, decided that a full listing would represent better value for the company's shareholders than a trade sale. As well as Candover, the business is 25 per cent owned by the Morris family, 10 per cent by Legal & General and 5 per cent by the management. A float is at least a year away as Mr Morris plans to make a series of acquisitions to expand the business, which last month staged the Brit Awards at Earls Court. Possible acquisitions could include a business publisher with an events arm, to boost Earls Court & Olympia's in-house exhibition capabilities.

The company stages 15 to 20 per cent of its own events through its Clarion subsidiary. Mr Morris hopes to double the number of Clarion-run events before the company floats.

Last year, Earls Court & Olympia turned over £70m and generated £20m earnings before interest, taxes, depreciation and amortisation.

Mr Morris said the downturn in the economy and the 11 September terrorist attacks had little impact on the business as most exhibitions were booked at least a year in advance. He admitted the opening of the ExCel exhibition centre in London's Docklands had taken away about 20 per cent of his business. However, he said Earls Court & Olympia's original business plan had anticipated 30 per cent.

ExCel, majority-owned by two Malaysian property companies, admitted to its bondholders last year that it would miss the targets outlined in its prospectus.

It is understood the Malaysians have appointed investment bank ABN Amro with a view to possibly selling their stake in ExCel. Other shareholders include publishers Reed and United Business Media. ExCel refused to comment.