Health Club takes Cannons private

RBPE will become the majority stakeholder in Health Club Investments Group after it finances £245m of senior debt for the £260m cash deal.

Royal Bank Private Equity (RBPE) is backing a £260m cash offer from Health Club Investments Group (HCIG) to take private Cannons Group, a health club chain.

The offer of about 154p for each Cannons share represents a premium of 36.6 per cent to the closing price in December last year, when Cannons announced it was opening discussions with outside investors.

Cannons shares stand at 154p, up 6.5p from yesterday’s close.

The deal will make RBPE the majority stakeholder in HCIG. Other investors include Allandale Holdings and members of the proposed management team. RBPE says the company will receive investment of about £150m for its growth plans over the next few years.

Deutsche Bank made the offer on behalf of Health Club Acquisitions, a company set up for the deal.

Royal Bank of Scotland Leveraged Finance (RBSLF) has provided senior debt worth £245m for the transaction. RBSLF and BNP Paribas provided mezzanine debt.