Bally Total Fitness, Chicago, may be on the verge of being acquired by Gold's Gym International, Irving, TX, according to multiple industry sources. Bally is owned by JP Morgan Chase Bank and Anchorage Advisors LLC. Gold's Gym is owned by TRT Holdings. Photo by Jennifer Ray.

In what would be a blockbuster deal, Gold’s Gym International (GGI) is in discussions to acquire Bally Total Fitness, multiple sources tell Club Industry.

The talks have been going on for about a month, and they are intensifying, according to sources. One source described the acquisition discussions as “hot and heavy and real.”

Bally CEO Michael Sheehan says he first heard rumors about the acquisition last week.

“Our general approach is to not respond to rumors,” Sheehan told Club Industry.

JP Morgan Chase Bank, the primary owner of Bally, Chicago, declined comment for this story. So, too, did a high-ranking official at GGI, Irving, TX.

The lack of public comments from Bally and Gold’s has not stopped speculation about an acquisition, when it would take place and what it would mean for the industry. One source says a deal could get done in the next month, around the time of GGI’s franchise convention July 18-20 in Las Vegas. Another industry observer says a deal might not be announced for another 60 to 90 days. If a deal materializes, the two companies would need to get landlord consents to close the transaction.

GGI is owned by private equity firm TRT Holdings, whose assets include the Omni Hotel chain. TRT bought Gold’s from Brockway Moran and Partners in 2004 for $158 million.

JP Morgan shares ownership of Bally with Anchorage Advisors LLC. In 2009, after Bally’s second bankruptcy in 17 months, JP Morgan received 50.5 percent of Bally’s equity, and Anchorage Advisors received 33.7 percent in a reorganization plan approved in bankruptcy court. Bally had been a public company prior to emerging from its first bankruptcy in 2007.

Under its current ownership, GGI has not traditionally disclosed financial information about the company to Club Industry for the magazine’s annual Top 100 Clubs list. GGI did report this year that it had 700 clubs (63 corporate clubs and 637 clubs run by franchisees) at the end of 2010.

Bally, after declining to submit financial information last year, reported $550 million in revenue for 2010, placing the company fifth on this year’s Top 100 Clubs list, which will be released next month. By comparison, Bally reported $1.059 billion in 2006 prior to its first bankruptcy.

NEXT PAGE: SPECULATION GROWS ABOUT GOLD'S AND BALLY

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