• The board of Moray and the Independent Directors of Fitness First announce the terms of a recommended cash offer for Fitness First to be made by UBS Warburg on behalf of Moray. Moray is a company recently formed at the direction of Cinven, a leading European private equity firm, for the purpose of making the Offer.
  • The Offer will be 175 pence in cash for each Fitness First Share, valuing the whole of the issued and to be issued share capital of Fitness First at approximately £204 million. Fitness First Shareholders will be offered a full Loan Note Alternative.

The Offer represents:

– a premium of approximately 46 per cent. to the Closing Price of 119.5 pence per Fitness First Share on 19 November 2002, being the last business day prior to the announcement that the Fitness First Board was investigating options to maximise shareholder value; and

– a premium of approximately 9 per cent. to the Closing Price of 160.0 pence per Fitness First Share on 9 April 2003, being the last business day prior to the announcement of the Offer.

  • The Moray Group has agreed to acquire or has received irrevocable undertakings and letters of intent to accept, or procure the acceptance of, the Offer in respect of 45,943,037 Fitness First Shares, representing approximately 39.7 per cent. of the issued share capital. Further details of these undertakings and letters of intent are set out in paragraph 3 of the full announcement.
  • The Moray Group has entered into certain arrangements with the Management Team in relation to their participation in the equity of the Moray Group. In accordance with the City Code, these arrangements must be approved, by way of an ordinary resolution, at an extraordinary general meeting of the Independent Shareholders of Fitness First. Details of these arrangements and notice of the Fitness First EGM will be contained in the Offer Document, which will to be posted to Fitness First Shareholders shortly.
  • The Offer and the Management Proposals are being unanimously recommended by the Independent Directors of Fitness First, Walter Goldsmith and John Denning, who have been so advised by Investec and Dresdner Kleinwort Wasserstein.

Commenting on the Offer, Yagnish Chotai, a director of Cinven said:
"We are delighted that the Independent Directors of Fitness First have decided to recommend unanimously Moray’s offer and we look forward to working with Fitness First’s management and employees. The proposed transaction will allow Fitness First to continue to develop its business through a focussed investment programme."

Commenting on the Offer, Walter Goldsmith, Independent Director of Fitness First said:
"After an extensive process, the Independent Directors have concluded this offer is the best available option to maximise shareholder value and is a fair price given current market conditions."