Sunny offer for Club Med

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Sunny offer for Club Med

Sunny offer for Club Med
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Club Med’s top shareholders want to buy all of the holiday village operator.

Chinese investor Fosun International and AXA Private Equity currently own a total of 19 percent.

They are offering 17 euros a share for the stock they do not already have. That is 23 percent more than Friday’s closing price for the stock.

Club Med’s management favour the deal, but said they will have it independently assessed.

Fosun is keen to focus more on fast-growing Asian markets and away from recession-hit Europe, where holiday bookings are weak.

As the bourses opened on Monday Club Med’s share quickly rose to around the proposed 17 euros offer price. The stock has recovered from below eight euros in 2009, but is well short of its 2007 high of almost 50 euros.

Pioneer facing difficult times

Founded in 1950 and listed since 1966, Club Med was a pioneer of the all-inclusive holiday resort.

But it fell on hard times earlier this century amid stiff competition and an unsuccessful expansion into services, and its more recent drive to recast itself as an upmarket operator has been hampered by a flagging European economy.

The bid proposal comes as travel firms and airlines across Europe have seen bookings fall in recent months.

Club Med competes with global hoteliers such as Intercontinental and Accor, as well as tour operators such as TUI Travel and Thomas Cook.

Good mix

One Paris-based trader, who declined to be named, said the involvement of China’s Fosun in the offer could help Club Med’s chances of succeeding in that country.

“This generous friendly bid has great chances of success. The management always made clear it has great plans to develop in China and was clearly seeking a business partner, “ he said.

“The fact that the management would remain in place and the presence of a French institutional (AXA) in the deal is also making the bid easier to accept.”

Fosun first invested in the French company in 2010 and Club Med reiterated on Monday it hoped to make China its second-biggest zone after France by the end of 2015.