UK private equity firm Bridgepoint Capital is lining up a 175p-a-share offer for top end UK health and fitness club operator Holmes Place in a deal that values the company in excess of £175m.
Yesterday’s Sunday Times reports that the offer, which represents a premium of just under 20 per cent to the stock's 148p closing price on Friday, is over 40 per cent above the firm's share price prior to the announcement of talks regarding the possibility of a management buyout in late June.
Bridgepoint declined to comment on reports of a bid, although sources close to the company suggest an offer in the region of £175m is likely to be made ‘within a fortnight’. The firm is looking to back a bid led by Holmes Place chief executive Allan Fisher.
UK-listed fitness club operators have experienced a lack of investor appetite in recent years as investors question the long-term growth potential of the sector. Duke Street Capital recently completed a protracted takeover of Esporta, which succumbed to a 87.5 pence per share offer which valued the company at just under £150m.
Other interested parties in Holmes Place, which has 47 clubs in Britain and last year made pre-tax profits of £19.7m on turnover of £122.7m, include Cinven, although Bridgepoint is seen as the more likely victor. The firm, formerly known as NatWest Equity Partners, backed Holmes Place in the 1990s and its exposure to the sector includes the acquisition earlier this year of a 55 per cent stake in Virgin Active in a deal valuing the company at £110m.