Fosun, AXA sweeten buyout offer for Club Med, win board support
Chinese conglomerate Fosun International and Axa Private Equity have increased their takeover bid for France-based vacation resorts operator Club Méditerranée (Club Med). The new bid, worth EUR557 million ($729 million), has won favor with the company’s board.
The bid is now EUR17.50 in cash for all outstanding shares, up from EUR17 per share, which represents a 26.4% premium to the May 24 closing price. They will also pay EUR19.79, including coupon, per bond convertible in or exchangeable for new or existing shares (OCEANEs), up from EUR19.23.
The revised offer has received support from the Club Med board and investors representing 14.9% of the shares outstanding have now thrown their weight behind the bid, taking the total stock controlled by the buyer group to 34.2%. At least 50% of the shareholder vote is required for the transaction to go through.
Fosun and Axa plan to operate Club Med as a joint venture, owning 46% each and the balance held by 400 of the company's managers. Henri Giscard d'Estaing would remain CEO. Fosun currently holds 9.9% of Club Med and Axa has 9.4%.
Hong Kong-based private equity firm A Capital brokered the deal that saw Fosun buy a 7.1% stake in Club Med two-and-a-half years ago, as well as participating as a co-investor.
Fosun's strategic support has helped provide new direction for a business that was squeezed in Europe. Club Med has opened two properties in China and seen Chinese tourists numbers globally increase by about 40% in both 2010 and 2011.
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