Rutland Partners Circles JJB’s Fitness Clubs

LONDON (Reuters) – JJB Sports Plc (JJB.L), the struggling British sportswear retailer, said it was considering a number of second-round offers for its fitness clubs business as a March 16 deadline set by its lending banks approaches.

“The board is currently considering the terms of these offers with its advisers and its lending banks,” it said, cautioning there was no certainty a deal would be done.

Yesterday’s Sunday Telegraph newspaper said private equity firm Rutland Partners had made an approach to buy the fitness clubs business, which trades from around 50 sites.

Rutland Partners declined to comment and no one at JJB was immediately available to comment.

According to media reports, other possible suitors are Dave Whelan, JJB’s founder, and rivals Fitness First and LA Fitness.

JJB needs to sell the fitness clubs as its owes its lenders — HBOS (LLOY.L), Barclays (BARC.L) and Kaupthing about 60 million pounds ($85.34 million).

The firm’s current standstill agreement with the banks expires on March 16 and is conditional on it making progress on the disposal of the fitness clubs.

JJB said a “constructive dialogue” was continuing with its lending banks, adding that it was operating with their support under the terms of the standstill deal.

Last month JJB put its lossmaking shoe chains Qubefootwear and Original Shoe Company (OSC), which together made up its Lifestyle division, into administration, a form of protection from creditors.

Stripped of its fitness clubs and Lifestyle division, JJB would be left with a core sportswear retail business.

At 0955 GMT, shares in JJB Sports, which have lost 94 percent of their value over the last year, were up 0.9 pence at 8.44 pence, valuing the business at 21.3 million pounds — less than two weeks’ sales. ($1=.7030 Pound) (Reporting by James Davey; editing by Rhys Jones and Simon Jessop)