Fosun-owned Club Med operator raises $427m in HK IPO

The company sold 214.2 million shares – excluding the overallotment option – for HK$15.60 apiece, according to a filing. The indicative range for the offering was HK$15.60-20.00. Three cornerstone investors contributed approximately HK$380.7 million.

Fosun International acquired Club Med in 2015 for EUR939 million ($1.01 billion) following a two-year takeover battle. It led a consortium that also featured Ardian, Chinese GP JD Capital, Hong Kong-based Utour International Travel Services and Fidelidade, a Portuguese insurer majority-owned by Fosun. Between 2016 and 2018, Club Med underwent offshore and onshore restructuring, which saw several third-party investors taken out, including JD and Fidelidade. Fosun International then spun off the business at FTG, retaining an 81.76% interest.

FTG is the largest leisure tourism resorts group in a highly fragmented global market, with a 0.8% revenue share in 2017, according to Frost & Sullivan. It focuses on families, offering tourism destination experiences through Club Med, Club Med Joyview, and Atlantis Sanya. The company also has an alliance with Thomas Cook that provides tailored product offerings. Fosun International acquired a 5% stake in Thomas Cook in 2015.

As of June, FTG owned nine resorts, held operating leases on 43, and managed a further nine under contract with the owners. They are spread across 26 countries and regions. Club Med was founded in Europe in the 1950s and entered the Asia market in 1985. The company opened its first resort in China in 2010, not long after Fosun took a minority stake in the business.

There are now 15 resorts in Asia – six in China, three in Japan, two in the Maldives, two in Indonesia, and one each in Thailand and Malaysia. This compares to 42 resorts in Europe, the Middle East, and Africa (EMEA), and 12 in the Americas. Customers based in Asia Pacific account for 15.2% of revenue, with 17.7% coming from the Americas, and 67.1% from EMEA. China is the second-largest customer-contributing market after France.

FTG generated RMB11.8 billion ($1.7 billion) in revenue for 2017, up from RMB10.8 billion the previous year. Over the same period, the company’s net loss narrowed to RMB294.9 million from RMB472.6 million, while EBTIDA rose from RMB630.2 million to RMB746.3 million.

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• Topics
• Greater China
• Europe
• Consumer
• IPO
• China
• Fosun Group