China's Fosun, Axa Private Equity join management buyout of Club Méditerranée

Two of Club Méditerranée largest shareholders are acquiring the French leisure company in a deal that values it at €540 million ($700 million).

AXA Private Equity and Fosun International, China's largest privately-owned conglomerate, yesterday disclosed that they had teamed up with the management to buy Club Méd for €17 a share - a 23 per cent premium to Friday's closing price - for the stock they do not already own in the French-owned global leisure chain.

Fosun holds nearly 9.96 per cent stake in Club Méd, while Axa holds 9.4 per cent. Post acquisition, Club Med will be operated through a joint venture, where Fosun and Axa will hold 46 per cent each, and the remaining 8 per cent will be held by 400 Club Med managers.

Club Med, which was started in 1950 by former Belgian water polo champion, Gérard Blitz, said that it would appoint a committee of independent directors to assess the offer.

''The board took note of the friendly character of this offer,'' Club Med said in a statement. ''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.''

Club Med invented the all-inclusive holiday resorts in France and is today present in 40 countries through its 70 Club Med Resorts, including beach resorts and ski resorts, such as Aime la Plagne in France, Agadir in Morocco, Cancun in Mexico and Kabira in Japan.

With annual revenues of more than €1.3 billion, Club Med also operates a number of villas and the Club Med 2 cruise ship as well as offers business conferences hosting services within its resort villages. About 1.2 million people have their vacations at Club Méd resorts every year.

When individual travel market opened up to Chinese tourists in 2003, Club Med established sales offices in Shanghai, Beijing, Guangzhou and Chengdu.

Club Méd has decided to strengthen its presence in upscale resorts, by opening five villages between 2010 and 2015. Club Med has already initiated new projects in China, in particular its first Village, as a ski resort, in Yabuli, the largest Chinese ski station in north-east China, which will be opened by the winter season of 2010.

Club Med's goal is to attract 5 to 10 per cent of potential Chinese visitors to 4- and 5-star vacation resorts by 2015, representing just 0.2 per cent of the total Chinese population.

Hong Kong Stock Exchange-listed Fosun, run by its chairman Guo Guangchang, has investments in pharmaceuticals, property development, steel, mining, retail, services and strategic investments, with annual revenue of more than 35 billion RMB.