Duke Street dubs bid target Esporta 'accident prone'

Duke Street Capital yesterday stepped up its attack on its bid target Esporta, labelling the health and fitness club operator "accident prone".

The venture capital company, which is embroiled in a £133m hostile takeover battle for Esporta, spoke out at what it said was the fitness group's carelessness in losing five of its senior management team, including three executives, since it floated on the stock market just over two years ago.

Duke Street said a waiver of a banking covenant Esporta arranged with its lenders earlier this year has led to the payment of a waiver fee and resulted in higher interest charges on its debts. It also criticised Esporta for its two profit warnings in the past nine months.

The bidder said its 80p-a-share offer for Esporta represented a 56.9 per cent premium to its share price before bid speculation emerged last October.

Nick Irens, the leisure industry veteran running Duke Street's bid, said: "We are offering an attractive price for the business that still has a wide range of problems to solve."

Esporta hit back at the claims, insisting Duke Street was focusing on the past history of the group rather than looking ahead to the improvements the healths club group was planning to implement.

John Grieves, Esporta's chairman, said: "It is quite clear that our shareholders are not impressed by Duke Street's offer.... This nil premium offer materially undervalues the business, which has shown significantly improved performance under its new management."

He said Esporta would write to shareholders next week, setting out the strategy it believes would maximise prospects.