A group of investors is said to be interested in taking over the businesses owned by gym chain operator JV Fitness, which runs California Fitness, after one of the company’s shareholders filed a petition with the High Court seeking its liquidation.
A source told the Hong Kong Economic Journal that the group has been talking with the company since three weeks ago to acquire its businesses in Hong Kong and the mainland.
It has offered HK$100 million (US$12.89 million) for the deal.
Negotiations are now in the final stages, the source said, adding that both sides were set to meet again on Wednesday afternoon.
Bryan To, owner of FFG Martial Arts & Fitness Center who the source said is the leader of the group, declined to comment on the rumor.
But California Fitness, which JV Fitness operates along with nine other fitness clubs in Hong Kong, has confirmed that talks about an acquisition or stake sale with some potential investors are going on.
According to the source, the investor group will not make the acquisition in the name of FFG but it is likely to resell the acquired businesses to FFG in the future.
In April the Consumer Council reprimanded California Fitness after its marketing staff were accused of intimidating and misleading customers to sign up for membership and high-priced private lessons.
Aside from California Fitness, JV Fitness also operates yoga club mYoga and Leap fitness centers.
It has 12 branches in Hong Kong, and runs several units in Beijing, Shanghai and Guangzhou.
Details of the writ of liquidation filed by BeSpark Technologies Engineering are not clear, but a hearing has been set for Aug. 31.
Businessman Wong Ping-kuen is a major shareholder of the engineering company and was a board member of JV Fitness until he resigned in May.
A legal expert said a company can sell its equity before the liquidation process officially begins but not afterwards unless there is shareholder approval.
[Chinese version 中文版]
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