(Bloomberg) -- Basic-Fit NV shareholder Buckley Capital Management is urging the Dutch fitness-center chain operator to put itself up for sale, arguing the stock is worth double its current value.
The Miami Beach, Florida-based investor on Monday issued an open letter urging Basic-Fit’s board to initiate a strategic review. The fair value of the Amsterdam-listed company should be between €40 and €50 a share, according to Zack Buckley, managing partner of Buckley Capital.
“We view going private as a proactive opportunity for Basic-Fit to achieve several strategic goals that are in the best interest of the company, without being constrained by the short term pressures of being within public markets,” Buckley said in an interview with Bloomberg News.
While Basic-Fit doesn’t necessarily need fresh funds, the gym operator could attract significant interest from several private equity suitors if it were to launch a formal sale process, he added. The company was under ownership of buyout firm before. 3i Group Plc took a significant stake in 2013 and still owns about 6.6% of the company, according to data compiled by Bloomberg.
Shares of Basic-Fit rose as much as 4% on Monday after Buckley Capital’s statement. The stock advanced about 1.8% to €23.38 as of 1:53 p.m. local time, giving the company a market value of about €1.5 billion ($1.7 billion).
Basic-Fit operates over 1,500 clubs in the Netherlands, Belgium, Luxembourg, France, Spain and Germany with more than 4 million members, according to its website. The company started trading on the Amsterdam exchange in 2016 after a €820 million initial public offering. The stock has risen almost 55% since then but it’s trading far below its all-time high of €49.24 reached in November 2021.
Buckley Capital first invested in Basic-Fit in 2022 and owns just under 1% of the stock as of Monday. Other large shareholders in the company are in support of its demand for a strategic review, according to Buckley, who didn’t name those shareholders.
Basic-Fit now trades at just 6.5 times its estimated earnings before interest, taxes, depreciation and amortization over the next 12 months, while the firm’s fair valuation would put it at a multiple of 10 to 13 times, Buckley said.
A representative for Basic-Fit didn’t immediately respond to requests for comment.
--With assistance from Cagan Koc.
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