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Club Med gets €540m offer from its top investors Club Med gets €540m offer from its top investors
(4 months later)
The Club Med holiday business may want to consider renaming itself Club South China Sea: the French firm is set to be bought out by Chinese and French investors who are targeting China for its future growth.The Club Med holiday business may want to consider renaming itself Club South China Sea: the French firm is set to be bought out by Chinese and French investors who are targeting China for its future growth.
The company is hoping to break into the Chinese holiday market and aims to make the country its second-largest customer base within three years.The company is hoping to break into the Chinese holiday market and aims to make the country its second-largest customer base within three years.
The €540m (£462m) deal sees the French firm's two biggest shareholders, China's Fosun International and France's Axa Private Equity, offering €17 a share – a 23% premium to Friday's close. The share price rose to €17.02 a share on Monday.The €540m (£462m) deal sees the French firm's two biggest shareholders, China's Fosun International and France's Axa Private Equity, offering €17 a share – a 23% premium to Friday's close. The share price rose to €17.02 a share on Monday.
Club Med, which has traditionally focused its business in Europe and north Africa, said the approach was "friendly".Club Med, which has traditionally focused its business in Europe and north Africa, said the approach was "friendly".
It said: "The board took note of the friendly character of this offer. The board will meet again after the delivery of the report by the independent expert to provide its reasoned opinion on the terms of the tender offer."It said: "The board took note of the friendly character of this offer. The board will meet again after the delivery of the report by the independent expert to provide its reasoned opinion on the terms of the tender offer."
A joint statement from AXA and Fosun said they wanted to "implement a strategy in line with the difficult environment of the tourism market in Europe, in particular in France.A joint statement from AXA and Fosun said they wanted to "implement a strategy in line with the difficult environment of the tourism market in Europe, in particular in France.
"An acceleration of the development strategy in the emerging countries as well as the strengthening of the market shares in mature markets are necessary.""An acceleration of the development strategy in the emerging countries as well as the strengthening of the market shares in mature markets are necessary."
Henri Giscard d'Estaing, Club Med's chief executive and son of former French president Valéry Giscard d'Estaing, would remain in charge under the terms of the offer. He joined the company in 2002 and turned around its loss-making position after the business suffered from an ill-advised foray into the services sector, away from its traditional upmarket holiday villages.Henri Giscard d'Estaing, Club Med's chief executive and son of former French president Valéry Giscard d'Estaing, would remain in charge under the terms of the offer. He joined the company in 2002 and turned around its loss-making position after the business suffered from an ill-advised foray into the services sector, away from its traditional upmarket holiday villages.
Fosun and Axa have 10% and 9% stakes respectively, and Fosun could play a pivotal role in Club Med's expansion into China, where it launched its first resort in 2010.Fosun and Axa have 10% and 9% stakes respectively, and Fosun could play a pivotal role in Club Med's expansion into China, where it launched its first resort in 2010.
Club Med said revenues at its holiday villages in the six months to the end of April fell 6.4%, with bookings in Europe over the last eight weeks down 4.6%, owing to the weak French market. However, Asian bookings jumped 13.9%.Club Med said revenues at its holiday villages in the six months to the end of April fell 6.4%, with bookings in Europe over the last eight weeks down 4.6%, owing to the weak French market. However, Asian bookings jumped 13.9%.
The burgeoning Chinese middle class is becoming more demanding and overseas visits have topped 83m, with spending of $102bn (£67bn), overtaking Germany and the US to become the world's largest outbound tourism market, according to Chinese authorities.The burgeoning Chinese middle class is becoming more demanding and overseas visits have topped 83m, with spending of $102bn (£67bn), overtaking Germany and the US to become the world's largest outbound tourism market, according to Chinese authorities.
Chinese tourists tend to travel to Hong Kong, Taiwan and Macau – where they can gamble legally – but have started to look further afield.Chinese tourists tend to travel to Hong Kong, Taiwan and Macau – where they can gamble legally – but have started to look further afield.
According to Thailand's tourism authority, Chinese tourist numbers jumped 93% to 1.1 million in the first three months of 2013, and the country beat Hong Kong to the top spot for overseas visits for the first time.According to Thailand's tourism authority, Chinese tourist numbers jumped 93% to 1.1 million in the first three months of 2013, and the country beat Hong Kong to the top spot for overseas visits for the first time.
Chinese tourists are also particularly fond of French fashion brands including Dior, Louis Vuitton and Chanel, spending £3,500 per trip, according to China Confidential.Chinese tourists are also particularly fond of French fashion brands including Dior, Louis Vuitton and Chanel, spending £3,500 per trip, according to China Confidential.
Club Med pioneered the all-inclusive holiday resort in the 1950s and 1960s, but has recently struggled amid the economic downturn in Europe.Club Med pioneered the all-inclusive holiday resort in the 1950s and 1960s, but has recently struggled amid the economic downturn in Europe.
Jiannong Qian, of Fosun, said: "I am convinced that with AXA Private Equity and the current management, we have the means to face short-term uncertainties to support the development of Club Méditerranée, in particular in Asia, and consolidate its positions in Europe."Jiannong Qian, of Fosun, said: "I am convinced that with AXA Private Equity and the current management, we have the means to face short-term uncertainties to support the development of Club Méditerranée, in particular in Asia, and consolidate its positions in Europe."
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