Club Med Takeover

by Startacus Admin

The race for Club Méditerranée (Club Med) looks set to come to an end as Italian investor Andrea Bonomi’s offer to the value of 790 million euro has been granted full approval by the French stock market regulator. The approval marked a response from China’s Fosun International Ltd. and France’s Ardian, both of who have stated a withdrawal of their 18 month long standing offer valued at 557 million euro.

Bonomi had offered 21 euro per share on May 26^th of this year after AMF demanded on May 23^rd that he make a bid or be banned from doing so for six months. He had gathered money that weekend between loans from Italian banks Intesa Sanpaolo and UniCredit, and Ivy League who is an investor of Bonomi’s private equity firm, Investindustrial. Global Resorts was the final fiscal recipe for his ability to offer. GR is a monopoly 90% owned by Investindustrial with the other 10% owned by South African entrepreneur Sol Kerzner, Brazilian holding company GP Investments, and management group of amusement park PortAventura, and has declared an increase to Club Med’s investment plans, bringing their budget from 150million euro to 484 million euro.

The clear win for the tycoon was evident in recent months: prior to his offer, he was a clear major shareholder of the company having the single largest investment of 10%. He had met at length with son of owner Gilbert Trigano, Serge; they agreed that he would hold the position of non-executive chairman and Serge gave not only his support for Bonomi’s move but also promise of becoming an investor himself.  “It allows the group to seek-out options that are not purely Chinese and high-end” said Trigano, according to Reuters.

Bonomi received previous opposition from staff representatives upon his offer, most notably from CEO Henri Giscard d’Estaing who felt instability in handing Club Med to entirely foreign investors and whose job would be secured on the acquisition of the resort chain by Fosun and Ardian. However in July, Club Med’s board approved Bonomi’s attempt to buy the firm as they were heavily advised of the benefits a 20% increase in the chain’s value could have on the board as a whole.

The increased budget will see an expansion on resorts and bedding, a 15 million euro investment in marketing, a 5 million euro towards a new flagship store in Paris, 5 million euro to a new advertising campaign, 2.5 million euro towards modernising the company’s loyalty programme and 61 million euro for the development of partnerships between home and global operators, according to France Unquote.

While the Chinese market will be taken into account, Bonomi does not plan to put the same emphasis on its market as Fosun-Ardian had stressed. Instead, he hopes to focus on expansion within the Americas and Europe, and has expressed his interest in keeping France at the centre of the company’s interests. However, all eyes will now fall on the position of the CEO and on his plans for French staff affiliated with Ardian.

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Published on: 18th August 2014