Goals Soccer Centres in preliminary merger talks with Powerleague
Five-a-side football business Goals Soccer Centres has confirmed that it is in preliminary discussions with rival Powerleague over a potential merger.
The company said a tie-up was one of a number of "strategic opportunities" being assessed by the board.
In a statement the firm said: "The board of Goals notes the recent press speculation concerning discussions with Powerleague and the possibility of combining the two businesses.
"The preliminary discussions with Powerleague are but one of the strategic opportunities currently being assessed by the Goals board.
"Furthermore, at this stage, no commercial or financial terms have been agreed and no decision on any course of action has been made by the board. There is therefore no certainty that any transaction will proceed."
Goals returned to profit last year after posting a loss in 2015 and has been boosted by a new strategy under boss Mark Jones.
Part of his five-year plan includes a refurbishment programme, which has seen upgraded ProTurf pitches, new LED lighting systems and renewed stadia boards at pitches across its estate.
The East Kilbride-based firm posted pre-tax profit of £3.7 million in the year to December 31, compared with a £6.2 million loss in 2015. Sales rose 1.6% to £33.5 million.
Powerleague, which is owned by private equity firm Patron Capital, operates over 700 pitches.
Shares rose almost 7% to 109p in morning trading.
Sahill Shan, analyst at N+1 Singer, said that while the deal makes "huge sense", it could fall foul of competition law.
He said: "Strategically and financially a tie-up would make huge sense given how competitive the five-a-side football sector has become with the resurgence of the local authority sector.
"The main risk we envisage is whether any tie-up would trigger any competition issues and how these might be addressed."