Mixed reactions to potential VA takeover

Since our last post about a potential takeover bid by Virgin Active for the David Lloyd chain, we decided to investigate how this move would be received by those working in the sector.

We asked for some input across our Linkedin, Facebook and Twitter pages and it’s fair to say we had a pretty mixed reaction.

Initially, there were  a couple of prominent viewpoints which seemed to be raised quite regularly:

Firstly, that such a large monopoly in such a small sector wouldn’t be ideal as they would start to dictate pricing, and salaries.

Secondly, and more positively, that any deal of this size, would create substantial movement of staff across the sector, thus creating more job opportunities for all.

Thirdly, that the move would be positive for budget and mid market operators who feel they can compete with the service being delivered by the likes of VA.

We also spoke to employees of the parties concerned and again there were mixed feelings. Whilst most were excited about the new opportunities and investment the deal would bring, they were also concerned about the probably gulf in salaries and whether they would be kept on by their new owners.

We’ll keep you posted!

 

Virgin move for DLL takeover

Two of the biggest brands in the health and fitness market are gearing up for a merger. As reported last week, premium health club operator David Lloyd Leisure have been courting the interests of several investors who could save the debt ridden-business.

It’s now become apparent, in one of the worst-kept secrets in the sector, that rival chain Virgin Active are eyeing a potential takeover bid. The deal would create a £2bn health and fitness empire, although any potential merger is likely to be subject to approval by the monopolies commission.

The big question for industry insiders is: What effect does this have on our industry? Some will be concerned about the diminishing choice of large employers within the industry and that the lack of competition will have a negative impact on salaries. There’s certainly been a trend for senior managers to leave the industry when major takeovers occur and the losses were substantial with the demise of Holmes Place and Esporta.

However, VA may have competition from an unlikely source over the next couple of years as Fitness First rises from the flames of their CVA agreement with a concerted departure from the budget end of the market.

Original article available from skynews.com http://news.sky.com/story/1080502/virgin-active-eyes-2bn-david-lloyd-merger