Sir Richard Branson could be in line for a multi-million pound payday this year, as he plans a potential corporate overhaul of Virgin Active.
The British tycoon, who owns a 76 per cent stake in the chain of gyms, is in the early stages of looking at changing the ownership structure, according to sources close to the situation.
The possibilities, which include a float or a sale to private equity, are expected to value the whole group at around £1bn and could be agreed as early as the autumn. Either way, he is expected to retain a stake in the business after the ownership changes.
"After 10 years of ownership, the feeling is it may be time to crystallise some of the profits built up during that time," one source said, although stressed that plans were still in their inital stages.
The initial strategy was to float the company on the London Stock Exchange. Chief executive Matthew Bucknall, has openly talked about the possibility of listing, saying recently: "We would make a good public company". While that still remains an option, the volatile markets have seen the group look at other options.
There has also been some interest from private equity suitors. Among those that have been linked as potential suitors are Advent, Blackstone, CVC, and KKR. A spokesman for Virgin Active declined to comment.
The group already has two private equity investors in Permira and Bridgepoint Capital, which took minority stakes when they sold Holmes Place to Virgin in 2006. Mr Bucknall is also a former private equity specialist.
Virgin Active has built up a portfolio of 187 clubs, with 920,000 members around the world. The group has flourished during the credit crunch – which hit rivals including Esporta hard – and posted record profits in May. This follows double-digit earnings growth every year since it was set up in 1999.Reuse content