SOUTH coast health club operator Fitness First has confirmed that Moray has offered £204 million to acquire its business.

Moray is a bid vehicle backed by venture capital firm Cinven, which had been tipped as the favourite to acquire the Poole-based group.

Fitness First confirmed in January that it was talking to a third party after effectively putting itself up for sale in November, following a profits warning.

The 175p-a-share offer - valuing Fitness at £204 million - is a 46 per cent premium on the closing price of 119.5p on the day before Fitness First raised the 'For Sale' sign.

Previously, analysts had suggested Cinven was preparing a 200p a share bid.

As expected, chief executive Mike Balfour will stay at the group he founded around the concept of "affordable fitness".

The offer has been unanimously recommended by the company's independent directors.

Director Walter Goldsmith said: "After an extensive process, the independent directors have concluded this offer is the best available option to maximise shareholder value and is a fair price given current market conditions."

Outside the UK, Fitness First has operations in Europe, the Far East and Australia.

Fitness First has 720,000 members at its 311 clubs, 142 of which are in the UK.

In the year to October 31, it opened or acquired 111 clubs.