Brait to acquire Virgin Active

Holy smokes. Brait with a monster announcement this morning, out of Malta, the little European island. Here it is, the proposed acquisition of a c.80% interest in Virgin Active and withdrawal of cautionary announcement. Brait Mauritius is proposing that they buy 80 odd percent of Active Topco, which trades under the brand Virgin Active, for 682 million Pound Sterling, or 12.21 billion Rand. The group owns 267 clubs in 9 countries across 4 continents. And of course you will know well that they are gyms, clubs, places where you can keep and get fit and healthy. Places that you know and understand that an investment in your health is an investment in the future. The health and wellness theme is something that you know we like, it is evident in our investments in healthcare and more specifically in businesses like Discovery and Nike. People who are making your life healthier and better. The share price is around half a percent off, it seems that all and sundry, the competitions authorities and the shareholders will have to now decide whether this goes ahead.

Brait has a market cap of 44 billion Rand, this is huge. Remember that they have all the cash from the exit from Pepkor, Brait sold their 37.06 percent stake for 200 million Steinhoff shares and 15.086 billion Rand. 200 million Steinhoff shares at 77.52 Rand per share is worth 15.5 billion Rand, which is a lot more combined (30.5 billion Rand) versus the 25.7 billion that Brait valued the stake at. If this purchase goes through, the health club investment will be their second biggest investment after Steinhoff. And there will still be enough cash left over to do something else with. Good work and definitely left field.