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Holmes Place in bid war as Bridgepoint muscles in with £177m approach

Susie Mesure
Monday 29 July 2002 00:00 BST
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A bidding war is set to break out for Holmes Place after Bridgepoint Capital, the venture capitalists, had approached the upmarket fitness club operator with a bid, valuing it at £177m.

The move is likely to force Cinven, a rival private-equity group, to table a formal offer. It comes less than a month after the health club group, which saw its share price plunge after it scaled back its roll-out of new clubs, admitted that its chief executive, Allan Fischer, was exploring a management buyout.

Bridgepoint, which has offered 175p-a-share for Holmes Place, already enjoys a close relationship with Mr Fischer because it was an early backer of the company that he jointly founded in 1980. Bridgepoint helped to float the health clubs group at 128p a share in 1997.

Recent fears that competition at the top end of the market is becoming stiffer, coupled with evidence that consumers are starting to rein back spending, sent Holmes Place shares tumbling to a low of 107.5p earlier this year. Mismanagement at Esporta, a rival luxury clubs group that finally succumbed to a hostile bid from Duke Street Capital, another venture capital group, also hit the sector.

An offer of 175p represents a premium of almost 20 per cent to Friday's closing share price of 148p and a 40 per cent premium to the price before the group revealed that it was planning to delist. All three parties declined to comment yesterday.

Although the fitness clubs industry is still expanding rapidly, analysts favour clubs at the cheaper end of the market to emerge stronger from any economic downturn.

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