Fosun consortium set to win battle for Club Med
A consortium led by Fosun International looks set to emerge victorious from the long-running battle for Club Méditerranée (Club Med) after rival bidder Global Resorts withdrew from the process.
Global Resorts, which is controlled by Italian businessman Andrea Bonomi's Investindustrial, said it could not justify topping the Fosun consortium's most recent offer. The group now plans to exit its 18.9% stake in the vacation resort operator.
It brings to an end the longest takeover battle in French history - Fosun, which first invested in Club Med in 2010, launched a privatization bid in May 2013 in conjunction with Axa Private Equity (now known as Ardian) - in which the real victors have been minority shareholders. The bidding price has risen nearly 45% during the more than 18-month process.
The Fosun consortium announced in late December that it was willing to pay EUR24.60 per share, bettering a EUR24.50 bid tabled by Global Resources earlier that month. The consortium will also pay EUR24.82 apiece for outstanding convertible bonds, compared to Global Resources' EUR25.98.
The offer values Club Med at EUR939 million ($1.1 billion). The initial offer of EUR17 per share valued the company at around EUR556 million. A slightly improved offer of EUR17.50 per share won board approval but the deal was delayed following complaints that the price was too low. This prompted a to-and-fro battle between Fosun and Global Resources with an ever-larger roster of participants.
The Fosun consortium, which holds an 18.4% interest in Club Med, now includes Chinese GP JD Capital, Hong Kong Utour International Travel Services and Fidelidade, a Portuguese insurer majority-owned by Fosun, as well as Ardian. For its part, Global Resources recruited KKR as a co-investor.
Having initially said it would maintain Club Med's public listing, the Fosun consortium subsequently indicated that a full privatization would be considered. The group's plans for the resort operator involve an upmarket approach that capitalizes on the shortage of high-end resorts in China. Club Med currently has three resorts in the country.
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