Club Med board endorses improved Fosun buyout offer
The board of directors of Club Méditerranée (Club Med), the France-based vacation resorts operator, unanimously recommended that shareholders should accept an improved takeover bid from Chinese conglomerate Fosun International and its partners.
Last month, Fosun and Ardian Private Equity reactivated their interest in Club Med, forming a new consortium that includes Chinese GP Jiuding Capital and Hong Kong Utour International Travel Service.
The consortium, through a joint venture Gaillon Invest II, is willing to pay EUR22 per share for Club Med, valuing the company at EUR839 million ($1.08 billion). This tops the EUR21 per share offered by Global Resources, which is controlled by Investindustrial, a private equity fund managed by Italian businessman Andrea Bonomi.
Fosun and Ardian withdrew their takeover bid for Club Med in August, although Fosun said it would continue "exploring any potential options which would serve Fosun's and Club Med's best interest," along with Ardian.
Club Med's board said its members had all agreed to tender their shares to the latest offer by Gaillon Invest II, welcoming its global business expansion plan.
Fosun plans on working with management to "implement a strategy in line with the difficult environment of tourism market in Europe, in particular in France." This involves accelerating development in emerging countries while strengthening share in mature markets.
Fosun and Ardian first announced the privatization bid of Club Med in May last year and later increased the bid to EUR17.50 per share from initial EUR17. The revised offer received support from Club Med's board but the deal was delayed when minority shareholder's association ADAM and Charity Investment Asset Management (CIAM) filed complaints with AMF, arguing that the proposed acquisition price was too low.
Founded in 1950, Club Med operates 71 resorts across 40 countries on four continents, having intensified its focus on the luxury segment of the market in recent years. The company has two resorts in China but wants to have five in operation by 2015 with more than 200,000 Chinese customers.
Club Med's revenue came to EUR1.4 billion for the 12 months ended October 2013, down 3.5% on the previous year. The company posted a net loss of EUR9 million compared to a profit of EUR2 million in 2012
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