Duke Street Capital has today effectively upped its offer for UK fitness chain Esporta plc after it acquired shares in the open market at 87.5p, over 9 per cent up on the original offer submitted to shareholders in May.
Duke Street will now have to make a mandatory offer for Esporta’s entire share capital as today’s acquisition pushes the firm’s stake in Esporta above 29.9 per cent, the level at which the stock market stipulates an outright offer must be made.
The acquisition enables Duke Street to make an improved offer for Esporta without having to explicitly acknowledge the higher valuation of the company. Esporta shareholders had anticipated a higher offer to emerge, with only a small minority accepting Duke Street’s original 80p offer.
The revised offer values Esporta at £145m, a 70 per cent premium to the firm’s share price on 19 October 2001, the day before bid speculation started to drive up the stock.
If successful, Duke Street intends to ‘rebuild the premium status’ of the Esporta brand. Other elements of Duke Street’s plan for the business include formulating a strategy for Europe and injecting capital required for further growth.
The Esporta board is yet to comment on whether it will recommend the latest offer, although the firm’s management have earlier stated that the 80p offer represented a 40 per cent discount to the average historic EBITDA exit multiple of comparable transactions.Duke Street was unavailable for comment.