HEDGE-FUND investor Bluebay and investment bank Credit Suisse are preparing to take control of Danoptra, the health-club to fruit-machines group.

The two institutions are in talks to acquire Danoptra’s bank debt, which stands at about £80m.

Danoptra, previously known as Kunick, was taken private in a management buyout in 2002 with backing from Cognetas, the private-equity house.

It has two main businesses. One runs fitness centres on behalf of local authorities, while the other distributes gaming machines to pubs and other leisure businesses.

Both have struggled, leading to Cognetas writing off its equity in the deal. The borrowings are now being sold on in a debt-for-equity swap and a deal could be concluded in the next few weeks.

Cognetas appointed Derek Lloyd as Danoptra’s new chief executive at the end of November 2006. He is said to have done a good job stabilising the company and is expected to stay on after the deal with Bluebay and Credit Suisse is agreed.

According to the accounts, Danoptra recorded a pretax loss of £24.3m for the year to September 2006, a significant reduction on the £79.4m it lost in the previous 12 months. The next accounts are expected to show further improvement.

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