The buyout firm Permira is among a pack of bidders pursuing a possible £700m takeover of Third Space, the upmarket London-based health clubs operator.
Sky News has learnt that Permira, which has backed premium consumer brands such as Dr Martens, Hugo Boss and Valentino, has begun working on an offer for Third Space ahead of a deadline for formal bids later this year.
If it proceeds with a formal bid, the private equity group is likely to face stiff competition from rival bidders attracted to Third Space's rapid growth.
The gyms and wellness company operates 15 clubs across the capital, with a plan to double that number by the end of 2031.
The rapid expansion of its footprint and profitability has marked Third Space out in a sector often characterised by sluggish growth.
Third Space is owned by KSL Capital Partners, an American private equity firm, which appointed Goldman Sachs to handle an auction earlier this year.
Sources said its valuation ambitions ranged from between £700m to as high as £1bn.
Third Space operates sites in the City and Soho, as well as more suburban locations such as Clapham Junction and Wimbledon.
They are positioned at the luxury end of the gyms market, offering HYROX, hot yoga and dozens of other classes to members.
KSL acquired a stake in the business in 2021, acquiring a majority stake from Encore Capital, another investment firm.
Last October, Third Space secured £75m in debt finance from Oaknorth, alongside Searchlight Capital, another existing lender, to help fund its expansion.
"We are seeing exceptionally strong demand for Third Space memberships, with most of our clubs operating with waiting lists," Colin Waggett, chief executive, said last autumn.
"Our business sits at the heart of Londoners' desire for health and fitness, authentic experiences and luxury service, and Third Space is uniquely positioned to meet these demands."
Permira declined to comment.
(c) Sky News 2026: Permira plots £700m bid for upmarket gyms operator Third Space
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