Duke Street in for Esporta

Duke Street Capital is shaping up for a public-to-private deal for UK fitness chain Esporta.

UK private equity firm Duke Street Capital has suggested that it would be willing to make an offer in the region of 80p a share for Esporta, the UK fitness and health clubs operator.

The offer, which would value the firm at £133m, would represent a small premium to the current share price, although Esporta has seen its share price rise steadily since Duke Street started buying shares late last year.

An Esporta company statement issued yesterday said that an offer at this level “would materially undervalue the company and its prospects,” although the firm did not rule out future discussions with Duke Street Capital.

Since October, Duke Street has acquired just over 24.1 per cent of the issued share capital of Esporta, during which time the share price has increased from 54p to its current level of 79p. According to a source familiar with the offer, a valuation of between 75 and 80 pence per share would represent fair value for the fitness chain.

“The firm is in quite good condition in the UK, but its European operations, Spain in particular, are having a number of difficulties,” added the source. “Any deal to acquire the business would likely result in a number of disposals as well as acquisitions to try and establish the firm as one of the main players in the European market.”

Duke Street Capital has made a number of acquisitions across the leisure, health and entertainment sectors, and has a ten-year track record of investing in these sectors.

Earlier this year, Bridgepoint Capital acquired a 55 per cent stake in health and fitness chain Virgin Active, which valued the company at £110m.