Next Generation sells for half-price

Next Generation, the 14-strong sports club business founded by the former tennis star David Lloyd, was snapped up by the property group London & Regional for £101.7m yesterday. London & Regional is paying 185p a share in cash and will also take on the company's debts of around £100m. It beat off stiff competition from the fitness club owner Esporta and the leisure group Whitbread, which wanted to combine Next Generation with its David Lloyd Leisure chain, acquired from Mr Lloyd in the Nineties.

The deal triggers multi-million-pound profits for Next Generation's main shareholders, the brewing group Scottish & Newcastle, and the Irish businessmen and racehorse owners John Magnier, JP McManus and Dermot Desmond. S&N gets £12.7m, Mr Magnier £12.6m and Mr McManus and Mr Desmond around £12.2m.

S&N invested around £3.5m in a 15.1 per cent stake of the business when it was set up in 1996 by Mr Lloyd and his son Scott, and its holding is now valued at £16.2m. Mr Magnier owned 14.8 per cent of the company, Mr McManus 14.36 per cent and Mr Desmond 14.3 per cent.

Scott Lloyd, the chief executive, is staying on to run the business for London & Regional, and will get £2.7m from cashing in his 2.56 per cent stake. Next Generation's eight fitness clubs in Australia remain in the hands of Mr Lloyd, his Irish backers, and S&N.

London & Regional will fund the acquisition with loans from Deutsche Bank.