Italian investor Andrea Bonomi raises bid for Club Méditerranée to €915 mn
06 Dec 2014
Italian investor Andrea Bonomi yesterday raised his takeover offer for French resort operator Club Méditerranée (Club Méd) to €24 a share or €915 million ($1.13 billion), trumping a €23.50-bid from Chinese financial and industrial conglomerate Fosun International.
This is the seventh offer Club Méd has received since May 2013 when Fosun had initially teamed up with the management of Club Méd and AXA Private Equity and tabled a €17 a share offer. (See: China's Fosun, Axa Private Equity join management buyout of Club Méditerranée)
Club Med's investors have been watching with keen interest since the company's stock price has surged by over 70 per cent since Fosun made the first offer in May 2013.
Bonomi, through his investment arm Strategic Holdings, had slowly been buying shares in the resort chain and is now the single-largest shareholder with around 18.9 per cent, while Fosun along with the management of Club Méd hold 18.3 per cent.
Despite several rounds of counter-bids, Club Méd's management has consistently supported Fosun's offer.
The management is now alarmed that both bidders have now tabled bids that are valued more than the company's actual worth and the winning bidder will resort to drastic cost cuts and asset sales in order to recoup investment.
The French stock market regulator AMF has now stepped in and given the bidders shorter time to counter-bid, and yesterday said that if Fosun opts to respond, then it would have to make a counter offer latest by 12 noon ET on 19 December.
Club Med, which was started in 1950 by former Belgian water polo champion, Gérard Blitz, invented the all-inclusive holiday resorts in France and is today present in 40 countries through its 70 Club Med Resorts, including beach resorts and ski resorts, such as Aime la Plagne in France, Agadir in Morocco, Cancun in Mexico and Kabira in Japan.
With annual revenues of more than €1.3 billion, Club Med also operates a number of villas and the Club Med 2 cruise ship as well as offers business conferences hosting services within its resort villages. About 1.2 million people have their vacations at Club Méd resorts every year.
When the individual travel market opened up to Chinese tourists in 2003, Club Med opened sales offices in Shanghai, Beijing, Guangzhou and Chengdu.
Club Méd has decided to strengthen its presence in upscale resorts, by opening five villages between 2010 and 2015. It has already initiated new projects in China, in particular its first Village, as a ski resort, in Yabuli, the largest Chinese ski station in north-east China, which opened in the winter season of 2010.
Club Med's goal is to attract 5 to 10 per cent of potential Chinese visitors to 4- and 5-star vacation resorts by 2015, representing just 0.2 per cent of the total Chinese population.
Hong Kong Stock Exchange-listed Fosun, run by chairman Guo Guangchang, has investments in pharmaceuticals, property development, steel, mining, retail, services and strategic investments, and has annual revenue of more than $8.3 billion.
