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Club Med looks east as takeover goes ahead


Club Med looks east as takeover goes ahead


A Chinese conglomerate and a French private equity firm are to take over Club Med after they improved their offer for the holiday firm to 557 million euros.

China’s Fosun International and AXA Private Equity – who were already Club Med’s biggest shareholders – upped their price to 17.5 euros a share for the stock they do not already own.

The plan is to accelerate Club Med’s expansion into markets such as China to help it cope with falling bookings in Europe, where it gets 70 percent of its revenue.

Club Med’s board said it would back the deal and several of its top shareholders pledged support.

On Tuesday the shares were trading close to the agreed offer price, although well below their 2007 high of almost 50 euros.

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

But it has fallen on hard times in the past decade because of stiff competition and an unsuccessful expansion into services. A more recent drive to recast itself as an upmarket operator was hampered by a weak European economy.

The company has said it aims to operate five villages in China by 2015, including three by the end of this year.

Beyond China, Club Med is speeding up expansion in Russia and Brazil, with the goal to lift the contribution of emerging markets to sales from around 25 percent to 33 percent by 2015.

The new offer represents a 26.4 percent premium to the closing price on May 24, the day before the initial bid was announced, and was described by a source close to the bidders as “a gesture to win the backing of all shareholders”.

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