Former Comet Owner Plots Fitness First Bid

The controversial former owner of Comet, the collapsed electrical goods retailer, is plotting a takeover of Fitness First's British operations.

Sky News has learnt that Opcapita, a vehicle set up by former banker Henry Jackson, is one of several parties preparing bids for the UK division of what was once the country's biggest gym group.

Opcapita's involvement in the Fitness First auction comes nearly four years after Comet's collapse left taxpayers with a bill running to tens of millions of pounds.

Mr Jackson has since sought to rebuild the firm's reputation, investing in companies including BUT, the French home equipment retailer, and La Sirena, a Spanish frozen food chain.

In the UK, it has also been an investor in Game Group, the turnaround of which earned Opcapita a number of industry awards.

Mr Jackson, who is Opcapita's chief executive, last year recruited the former Somerfield boss John von Spreckelsen to chair the firm.

Two years ago, Opcapita raised €110m (£83m) for its first private equity fund, with financial commitments from more than 10 global institutional investors.

Comet's collapse in 2012 sparked thousands of job losses, prompting Sir Vince Cable, the then Business Secretary, to launch an inquiry into the circumstances surrounding the chain's failure.

No further action was taken as a result of the probe.

Opcapita and its backers walked away from the Comet collapse with tens of millions of pounds in cash and other assets, despite the Government having to foot a substantial redundancy bill.

Mr Jackson, who often features in tabloid newspapers alongside his musician wife Stacey, is also a former owner of MFI, which he sold just two months before it fell into administration in 2008.

A spokeswoman for Opcapita declined to comment on Wednesday.

Mr Jackson faces competition to buy Fitness First, including from Advent International, which wants to acquire the entire company, aided by Andrew Cosslett, its former chairman and chief executive who now works for the private equity group.

Once the largest chain in the UK by number of sites, the company has been through a painful financial overhaul since it was acquired by Oaktree Capital Management in 2012.

It (Other OTC: ITGL - news) shed dozens of struggling UK clubs through a mechanism known as a company voluntary arrangement in 2013, and revealed last year that profits in its home market had begun to improve after years of decline.

Other bidders for Fitness First's UK business, which has now got just over 70 sites, may include Bannatyne's and Mike Ashley, the billionaire tycoon who founded the Sports Direct business and who bought more than 20 sites from LA Fitness in 2014.

Fitness First also has sizeable operations in Australia and Germany and ambitious growth plans in Asian markets including Hong Kong, India, Singapore and Thailand.

In total, Fitness First has more than 370 clubs and around one million members globally.

The company, which has yet to release results for 2015, racked up combined pre-tax losses of almost £100m in the two previous years, partly because of the costs associated with its financial restructuring.

A potential sale of its businesses in the UK and elsewhere follows a number of takeovers in the industry, with the remainder of LA Fitness swallowed up last year by Leeds-based Pure Gym – now the biggest operator in Britain by number of clubs.

The Gym Group, which operates at the value end of the market, listed on the stock market in November and has since seen its value rise from £250m to around £300m.