UK gym club chain to carry out strategic review

UK gym club chain Esporta today appointed investment bank Lazard to carry out a strategic review which could lead to a sale of the business.

Simon Halabi, the Syrian property entrepreneur, bought the health and fitness group last year for an estimated £500m (€735m).

Lazard’s review will encompass “strategic alternatives” and possible changes to the group’s capital structure, which could see Mr Halabi pumping millions more into the company.

The announcement of Lazard’s review follows weekend reports that Esporta was under pressure from its bank, Societe Generale.

The bank was said to be having difficulties syndicating £330m (€485m) in debt funding for last November’s deal to buy Esporta from private equity group Duke Street Capital due to the present turmoil in credit markets.

Esporta chief executive Glenn Timms said today that the group’s owners were “in constructive discussions” with all stakeholders “to create a firm platform for the development of the Esporta business”.

The chain has a membership base of nearly 200,000 in more than 50 clubs across the UK.

Mr Timms added: “Members, suppliers and employees are not directly impacted by this review of capital structure and strategic alternatives, and should ultimately benefit from a stronger Esporta.”

Esporta has been hit by the departure of senior staff since Mr Halabi bought the business.

Mr Timms, the former boss of Deloitte outsourcing company Liberata, replaced Neil Gillis as chief executive, while today Esporta also announced an interim finance director to replace Michael Ball, who also quit.