Holmes Place enters exclusive offer talks

Holmes Place has announced today that it has entered an exclusivity agreement regarding a possible offer for the company - believed to be with Bridgepoint Capital.

The offer is subject to due diligence, but it is thought that Bridgepoint, who backed Holmes Place before its flotation in 1997, would be prepared to offer between 120-130p per share - well below the 200p per share offer made by rival operator Cannons, which fell apart last year after Holmes Place issued a profits warning.

With January and February being a crucial time for the health club market as new members join post-Christmas, Holmes Place must perform well if it is to land an attractive offer.

In a trading update also issued today, the health club chain admitted it was still experiencing high rates of attrition at its city and its older clubs and that with growth in Germany and Austria slower than expected, it has ended the financial year with around 260,000 members, well short of its anticipated 300,000.

Confirming its statement of 17 October, Holmes Place has declared results for the year ending 31 December will be significantly below expectations, adding: 'The Board believes that the UK health and fitness marketplace will remain difficult for the foreseeable future.'