JJB Sports considers takeover bid
Struggling retailer JJB Sports is mulling over a possible private equity-backed takeover bid for its health and fitness arm, it was reported today.
Rutland Partners is said to have made an approach to buy the health clubs business as a March 16 deadline set by JJB’s lending banks fast approaches.
JJB is also understood to have received interest in the subsidiary from a number of parties, including its founder Dave Whelan and rivals Fitness First and LA Fitness, according to The Sunday Telegraph report.
The reported potential offer from Rutland Partners comes ahead of a tough week of negotiations between JJB and its banks, thought to be owed at least £60 million between them.
JJB was last month granted breathing space until March 16 as it seeks to raise cash by selling its health clubs business.
A week later the sports chain put its Original Shoe Company (OSC) fashion retailer and Qube footwear stores in the lifestyle division into administration, with the loss of more than 400 staff.
Administrators KPMG closed 37 OSC and eight Qube outlets with immediate effect.
JJB had been reviewing its options for the lifestyle arm over a number of months before the move after the division made an estimated £15 million loss in the year to January 25.
The subsidiary’s troubles is also predicted to drag the wider group deep into the red, with JJB warning last month that it expected to post losses of up to £10 million for the year to the end of January.
It is now hoping to bolster its battered finances with the sale of its healthcare chain, which operates from more than 50 sites.
Reports suggest the highest offers made so far for the health clubs has reached £41 million – far lower than the £70 million to £100 million the company is thought to have hoped for initially.
Neither JJB nor Rutland Partners were immediately available for comment.
