Date
16 December 2017
French resort operator Club Mediterrannee plans to expand in markets such as China, which should widen a client base historically dominated by Europeans. Photo: Bloomberg
French resort operator Club Mediterrannee plans to expand in markets such as China, which should widen a client base historically dominated by Europeans. Photo: Bloomberg

Group led by Chinese billionaire Guo set to acquire Club Med

A consortium led by Chinese billionaire Guo Guangchang is expected to acquire French resort operator Club Mediterrannee after Italian rival bidder Andrea Bonomi declined to raise his offer on Friday.

The acquisition, which is expected to be backed by the French company’s board this week, will put an end to the longest-running bid battle in recent French corporate history, Reuters reported.

Investors are hoping Club Med’s new owners will invest in the operator’s upscale repositioning and expansion in markets such as China, which should widen a client base historically dominated by Europeans, according to the news agency.

Guo, who has a net worth of about US$4.3 billion according to Forbes estimates, has described Club Med as an ideal investment to tap booming demand from rich Chinese urbanites for upscale leisure resorts.

The board of Club Med is expected to issue a statement on the Chinese bid in the next few days, a spokesman for the Paris-listed company said on Sunday. It has said before it would only respond to the last standing offer for the company.

French market watchdog AMF will vet the Chinese-led offer, which values Club Med at 939 million euros (US$1.13 billion), and set out a timetable, the report said.

Guo’s 24.60 euro a share offer was 0.60 euro higher than Bonomi’s last bid and was the eighth offer for Club Med since May 2013 when Guo first offered 17 euros.

The Chinese offer values Club Med at more than 15 times the company’s current estimated underlying earnings, putting it at a premium to the sector’s average of around 13 times.

Club Med management, led by chief executive Henri Giscard d’Estaing, has consistently backed Guo’s offer which is why investors expect it will recommend his offer.

Guo’s bid is being made through Gaillon Invest II, which is majority controlled by his Fosun conglomerate (00656.HK).

It now comprises Fosun with a 62.6 percent stake, Portuguese insurer Fidelidade with 20 percent, French private equity partner Ardian with 5.8 percent, the management of Club Med with 2.9 percent and Chinese travel agency U-Tour with 8.7 percent.

Brazilian group Nelson Tanure, with which Club Med will build its fourth resort in Brazil, could also take a stake of up to 20 percent in Gaillon II once the offer goes through.

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RC/CG

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