The Bannatyne Group is sizing up a £300m float on London’s Alternative Investment Market (AIM) as owner and founder Duncan Bannatyne seeks funds to expand his health club, spa and hotel empire.

Several sources have confirmed to Health Club Management that the company is reviewing its investment options, with an IPO – possibly before summer – the most likely outcome. It is understood that Bannatyne wishes to retain a majority stake in the business that he founded in 1996.

Mirabaud Securities and Allenby Capital are advising The Bannatyne Group, which hopes to raise fresh capital of around £85m to continue with its expansion and refurbishment programme.

The Group is currently working through a £16m investment programme to refurbish its 66-strong estate, while it also wants to carry forward growth momentum from recent acquisitions such as the purchase of Clarice House country hotel and spa, as well as the Xpect health club in Braintree.

After a tricky 2015, which saw the jailing of former finance director Christopher Watson for defrauding the company out of nearly £8m, the company now has a new top team in place – helmed by CEO Justin Musgrove – which is committed to leading the business into a new era.

At a time when the mid-market has faced competition from both budget clubs and boutiques – a period which has led to rivals LA fitness sold to Pure Gym and Fitness First also put up for sale – Bannatyne Group is working to redefine itself as a premium proposition.

The new philosophy seeks to offer an "upmarket service with budget club efficiency" and has seen heightened focus on customer experience, improved technology and smarter use of the synergies between the health club, spa and hotel arms of the business.

Asked to comment on the IPO plans, a Bannatyne Group spokesperson said: “Bannatyne notes the speculation regarding a potential IPO. Bannatyne is a successful business that is always seeking the best strategic route forward.

“As always we have a number of strategic options open to us, including staying as we are and raising additional finance to expand our business. We have not made any decision on the direction we will take.”

The health club market has been awash with IPO activity and speculation since last November, when The Gym Group became first UK gym operator to go public in more than a decade. Pure Gym is understood to be lining up a £500m+ IPO, while David Lloyd Leisure has also said a listing is a possibility for its chain in the next couple of years.

To read a feature on how fitness businesses are working to attract investment – from the March 2016 edition of Health Club Management – click here.