Chinese conglomerate Fosun International Ltd (復星國際) zeroed in on its 18-month quest to buy French holiday resorts group Club Med SA on Friday when Italian businessman Andrea Bonomi refused to raise his latest offer.
Fosun looked assured to win what became the longest bidding war in Paris bourse history when Bonomi’s Global Resorts SAS announced on Friday it would not better the 24.60 euro (US$29.55) per share price the Chinese group proposed for Club Med on Dec. 19.
That offer — which topped Global Resort’s last bid of 24 euros per share — values Club Med at 939 million euros, which represented too much, in Bonomi’s view.
Photo: Bloomberg
“Having carefully analyzed the public offer for shares in Club Med SA, and, in particular the company’s valorization level, Global Resorts SAS has decided not to increase its bid, and consequentially intends to withdraw its offer,” financier Bonomi explained in a statement.
Bonomi’s decision clears the way for Fosun and its Chinese, Brazilian, Portuguese and French partners to move ahead with the acquisition of the famous French holiday group.
After weathering rough business seas over the past decade, Club Med improved its financial health by targeting higher-end clients, particularly among wealthier sections of emerging economies.
For example, according to Club Med figures released last month, 80 percent of the 25,000 new clients the group attracted in 2013 were Chinese or Brazilian.
Fosun — with whom Club Med has worked in expanding its activities in China — has said it wants to guide that continued expansion into new markets. However, Fosun has also stressed it wants to “continue to invest in France, Club Med’s leading market, to continue to win new parts of the market and outperform its competitors.”
Fosun’s looming bid victory does not come without some risks, however.
Despite its recently improving financial fortunes under its recalibrated business strategy, Club Med is reportedly set to reveal a net loss of 12 million euros for last year, on turnover of 1.38 billion euros.
Still, Fosun’s 24.60 euro per-share bid for Club Med — which owns 70 holiday resorts in 26 countries, and employs about 13,000 people — is considerably lower than the stock’s closing price on Friday of 25.09 euros.
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