Luminar close to Northern takeover

A new wave of consolidation looked set to sweep the leisure sector yesterday as Luminar, the nightclubs owner, indicated that it was close to agreeing a takeover of its larger rival, Northern Leisure.

Luminar, which owns the flagship Hippodrome club in London's Leicester Square, said talks between the two companies, which were first announced on 10 April, were close to completion. Stephen Thomas, Luminar's chief executive, said: "I think technically the board of Northern Leisure has accepted the offer."

The deal would see Northern Leisure shareholders receive one Luminar share for every four Northern shares, as well as a special dividend of 4.5p. It would take the number of the combined group's venues to 250, including Luminar's Chicago Rock Cafe chain and Northern's Jumping Jaks and Hot Shots bars. The combined group would have a market capitalisation of about £410m.

An earlier attempt by the two companies to merge collapsed last year as Luminar turned its attention to buying 27 clubs from Allied Leisure and Northern doubled its size by snapping up Rank's nightclubs division. Greg Feehely, an analyst at Albert E Sharp, said: "On balance, the likelihood is that the deal will go through this time."

Separately yesterday, Waterfall, the snooker clubs and bowling alley operator, announced it had agreed to a £22.7m takeover by Allied Leisure. The two companies resolved their differences after going head-to-head last year to buy European Leisure, a battle from which Allied emerged triumphant.

Mr Feehely said: "This deal makes sense. It is a clear-out at the bottom end - rest in peace, Waterfall Holdings."