Fosun consortium raises offer for Club Med yet again
A consortium led by Fosun International has submitted another improved offer for Club Méditerranée (Club Med) – extending a process that has already more than 18 months and during which the bidding price has risen nearly 45%.
Fosun said in a regulatory filing that the consortium is offering EUR24.60 per share, bettering the most recent bid of EUR24.50 tabled by Global Resources, which is controlled by Italian businessman Andrea Bonomi's Investindustrial. It is also willing to pay EUR24.82 apiece for outstanding convertible bonds, compared to Investindustrial's EUR25.98.
The offer values Club Med at EUR939 million. When Fosun - which first invested in the company in 2010 - launched a privatization bid in May 2013 in conjunction with Axa Private Equity (now known as Ardian), it offered EUR17 per share, for an overall valuation of around EUR556 million.
Fosun, Ardian and Club Med's management won board support for a sweetened offer of EUR17.50 per share, but the deal was delayed following complaints that the proposed acquisition price was too low. They withdrew their bid in August after French regulators approved a rival offer from Investindustrial, but re-entered the fray the following month.
By this point, the Fosun-led consortium - which holds an 18.4% interest in Club Med - included Chinese GP JD Capital, Hong Kong Utour International Travel Services and Fidelidade, a Portuguese insurer majority-owned by Fosun, as well as Ardian.
JD and Utour are participating in the acquisition vehicle, Gallion Invest II, through a joint venture that involves Jiuding Capital Growth Fund I and II. Fidelidade was going directly into the tender offer alongside Gaillon Invest II but will now invest through the vehicle, which would make it easier for the consortium to squeeze out minority shareholders with less than 5%, should the offer be accepted.
Bonomi - who owns 18.9% of Club Med through Investindustrial - has also bolstered his consortium, with KKR expected to hold 20-40% of Global Resources, if the bid is successful.
Investindustrial plans to privatize Club Med and invest in expanding the company's customer base and geographic footprint. The Fosun consortium favors a more upmarket approach. It was looking to maintain Club Med's public listing but has since said it would consider a full privatization.
Bonomi has until January 7 to submit a counter offer. Shares in Club Med closed at EUR25.00 on December 19, having gained more than 80% since the original takeover bid was launched.
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