Club Mediterranee’s top shareholders plan to take over the French holiday firm in a bid that values it at around 541 million euros ($700 million), to accelerate its shift to fast-growing emerging markets.
Chinese investor Fosun International and AXA Private Equity said Monday they would team up with management to offer 17 euros a share for the stock they do not already own, a 23 percent premium to Friday’s closing price.
Chief Executive Officer Henri Giscard d’Estaing, who has spearheaded Club Med’s upmarket shift and expansion away from recession-hit Europe, said the friendly bid would give the group freedom to focus on emerging markets.
“We need to be free from short-term constraints for the next four to five years,” he said.
Founded in 1950 and listed since 1966, Club Med was a pioneer of the all-inclusive holiday resort.
But it fell on hard times in the past decade because of 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.
One Paris-based trader, who declined to be named, said Fosun’s involvement would help Club Med’s achieve its aim to make China its second-biggest market after France.
Club Med aims to operate five villages in China by 2015, including three by the end of this year, Giscard d’Estaing said.
Beyond China, Club Med is speeding up expansion in Russia and Brazil, with the goal to lift the contribution of emerging markets sales to 33 percent by 2015 from around 25 percent.