Pure Gym, the UK’s largest health and fitness chain, is close to abandoning a £ 1.5bn IPO amid growing signs of shaking among investors.
Sky News has been informed that Pure Gym, which is majority owned by the private equity firm Leonard Green & Partners, may as soon as this week decide to pay tribute to its proposed IPO.
If confirmed, the move would underscore the concerns that have gripped the London Stock Exchange market in recent weeks.
Marley, a roof tile manufacturer, postponed the £ 500m quotation earlier this week, citing market volatility, while Fruugo, an online marketplace, said last week that it “paused” a float.
Pure Gym has not formally announced an IPO but said in August that it was considering one of the options to raise capital.
It appointed Morgan Stanley and Barclays to head the list, with Berenberg, Jefferies and the Royal Bank of Canada in supporting roles.
City sources said an IPO had emerged as the preferred option for the company, which trades from more than 500 websites across Europe, including more than 285 in the UK.
It was unclear whether Pure Gym would examine other capital raising alternatives if it would withdraw the listing, or when an IPO could be revived.
Investors say the company would probably have tried to raise hundreds of millions of pounds if the float had moved on.
The proceeds would be used to accelerate new gym openings and pay down its large debt pile.
The company is led by Tony Ball, the former BSkyB CEO, and is run by CEO Humphrey Cobbold.
“The pandemic highlighted the importance of community gym memberships and we were pleased to welcome our members back when we reopened,” Cobbold said in August.
He added that it was “natural” for the company to seek new funding.
Pure Gym has returned well from the initial shock of the pandemic, when the closure of its sites resulted in losses of £ 0.5 million every day.
A spokesman for Pure Gym declined to comment.