Chinese Fosun leads counter-bid for French Club Med
Paris (AFP) - Chinese conglomerate Fosun struck back with a new offer to control high-profile French holiday firm Club Med on Friday, in a last-minute attempt to outflank an Italian bidder.
Club Med, once famous for thatched-roofed, free-wheeling holiday villages which inspired a popular comedy film in France, is coveted for its potential to appeal to new middle classes in emerging economies.
In its early days, Club Med was associated very much with the French way of having fun, and was seen as a strong French brand. If the latest bid is successful, the company will come under strong Chinese influence, but will retain a listing on the Euronext market in Paris.
Fosun, with its French ally Ardian and other partners, made a counter-bid valuing Club Med at 839 million euros ($1.08 billion), they said on Friday.
The latest offer, lodged just hours before a deadline ran out, outbid by 4.8 percent an offer of 790 million euros by Italian businessman Andrea Bonomi and his associates.
The new bidders said that they would boost Club Med's strategy of developing market shares on mature markets, notably in France, and on rapidly growing markets such as China, Brazil, Russia, and South East Asia.
Club Med first became a high-profile name in the European tourism industry because it offered holidays in somewhat hippy style villages where sports activities were included.
It has since moved up-market, weathered financial storms in the process, and is now looking for further expansion, including in China.
Fosun, Ardian, travel company U-Tour and Portuguese insurance firm Fidelidade, pitched their offer for Club Mediterranee at 22.0 euros a share.
That compared with 21.0 euros offered by Bonomi, and with 17.50 euros, valuing Club Med at 590 million euros first offered by Fosun in an unsuccessful offer in partnership with investment firm Ardian.
The terms include 23.23 euros per convertible share.
U-Tour, quoted on the Shenzhen stock market, is a leading tour operator in China and already sells Club Med holidays. Fidelidade is controlled by Fosun.
When the first joint offer by Fosun and Ardian was topped by the arrival of Bonomi as an alternative buyer, Fosun and Ardian pulled out, and had until the end of today to make a new offer.
- Fosun leads bid -
The new bidders said that Fosun was "the majority partner" in the latest offer and that Ardian was playing only a small role.
Their bid is backed by the board of Club Med, which had backed the first Fosun-Ardian offer in 2013.
The board had argued the first time round that the strong role to be played by Ardian in that initial bid would have retained control in France. But now Ardian is taking a back seat.
Trading in shares in Club Med had been suspended on Friday at the request of the stock market regulator.
The shares were being quoted at 21.27 euros at the close of trading on Thursday, signalling that investors expected a counter-bid at a higher price than that offered by Bonomi.
The latest offer is being made via a vehicle called "Gaillon Invest II" in which Fosun has an interest of 85.1 percent, Ardian 5.0 percent, U-Tour 7.5 percent and Club Med executives 2.5 percent. It is bidding alongside Fidelidade.
The structure of this vehicle could be enlarged to include other shareholders but Fosun would remain the main shareholder.
The statement said that Brazilian conglomerate Docas Investimentos headed by Nelson Tanure, which is already an operating partner for Club Med, had expressed interest in talking a stake of up to 20 percent in the Gaillon bidding consortium.
