Talwalkars rally over 16% on reports of stake sale to David Lloyd

NEW DELHI: Talwalkars Better Value Fitness Ltd rallied as much as 16.1 per cent in trade on Thursday to hit its fresh 52-week high of Rs 241.70, after ET reported that British health and fitness group David Lloyd is likely to buy 20 per cent in Talwalkars for Rs 100 crore.

British health and fitness group David Lloyd is buying around 20 per cent stake in Talwalkars Better Value Fitness for Rs 100 crore at Rs 300 a piece, valuing the health fitness chain at Rs 500 crore, ET quoted three people with direct knowledge of the deal.

At 10:40 a.m.; Talwalkars pared some of the morning gains but was still trading 9.2 per cent higher at Rs 227.30. It hit a low of Rs 222.55 and a 52-week high of Rs 241.70 in trade today.

The deal, which will be signed at the fitness chain's board meeting on August 7, will help the company expand its reach across the country, these people said. ET was first to report about the proposed deal on March 27.

"David Lloyd will purchase 20% stake in Talwalkars for Rs 300 a share, more than 30% premium to the traded price of Rs 207.7 on the stock exchange," an investment banker aware of the matter told ET. The company commands a market value of Rs 417 crore, with owners Madhukar and family owning 54.7 per cent stake.

Talwalkars is a Mumbai-based chain of health centres. In 2012, the company announced its partnership with David Lloyd Leisure Group to provide consulting for leisure and sports clubs in highend residential developments, gated communities and corporate campuses.