New York and London-based private equity firm MidOcean Partners has cut its bid for UK health and fitness club operator LA Fitness to just over £140 million (€205 million; $265 million) including debt according to reports.
The parties reportedly entered talks in December when MidOcean was preparing to offer around 250 pence per share – approximately £160 million. The new offer price of 220 pence per share follows a fall-off in trading at the health club chain since January. The offer includes assumption of approximately £50 million of debt
LA Fitness operates 69 fitness clubs in the UK and the company announced EBITDA (earnings before income tax, depreciation and amortisation) of £9.6 million on sales of £41.5 million in the six months to Jan 31, 2004. Its share price closed at 201.5 pence on Friday evening.
The move for LA Fitness comes after a lull in the privatisation of UK health clubs by private equity firms following a spate of activity in 2003/4.
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LA Fitness is being advised by Close Brothers Corporate Finance and law firm Berwin Leighton Paisner. Citigroup and Linklaters are advising MidOcean.
In April 2004, MidOcean announced a merger with US firm Ripplewood Holdings to collaborate on investments and raise a joint fund. However, since then the firms have not completed any joint transactions and continue to raise joint funds.
MidOcean Partners II is currently raising its second, $435 million fund and in March, Ripplewood announced plans to list its Japanese buyout fund on the Euronext Brussels stock exchange.