First Leisure clubs saved by MBO

The management buy-out deal at First Leisure has saved most of the operator's clubs.

Receivers RSM Robson Rhodes have agreed the sale of 22 nightclubs to an MBO team led by former First Leisure chief executive John Smith.

Along with six other First Leisure executives, Mr Smith has formed a new business, the Nightclub Company, which has backing from a consortium of banks for a deal estimated to be worth up to £40m.

First Leisure went into receivership in May, partly as a knock-on effect of the collapse of rival Springwood Leisure. Springwood bought eight of First Leisure's nightclubs in 2002, and its demise left the company as guarantor of the rents.

Mr Smith said: "I am delighted to be able to acquire these businesses. These venues are some of the top nightclubs in the UK, located in some of the best cities and towns.

"More importantly, working in these venues are 1,600 very talented and capable people who, over the past 12 months, have demonstrated that they can provide an amazing night out for what is an ever-demanding and sophisticated audience."

The Nightclub Company's senior management team will also include commercial director Roger Dyer, operations team Peter Welsh, Nigel Blair, Sean Brett and Craig Smith, and company secretary Saadia Ahmad, who are all former First Leisure management.

Four venues not included in the deal - Blue Orchid and Heroes in Croydon, Lexington Avenue in Hull and Destiny in Derby - will be managed by the Nightclub Company on behalf of the Receiver.

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MBO at First Leisure (30 June 2004)