PARIS:- Chinese conglomerate Fosun zeroed in on its 18-month quest to buy French holiday resorts group Club Med 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 company announced Friday it would not better the 24.60 euro ($29.55) per-share price the Chinese group tabled for Club Med on December 19.
That offer — which topped Global Resort’s last bid of 24 euros ($28.82) per share — values Club Med at 939 million euros ($1.12 billion), which represented too much in Bonomi’s view.
“Having carefully analysed the public offer for shares in Club Med SA, and, in particular the company’s valorisation level, Global Resorts SAS has decided not to increase its bid, and consequentially intends to withdraw its offer,” financier Bonomi explained in a company statement.
Bonomi’s decision clears the way for Fosun and its Chinese, Brazilian, Portuguese and French partners to move ahead with final 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.
According to Club Med figures released in December, for example, 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 guide that continued expansion into new markets.
But 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 ($14.41 million) in 2014, on turnover of 1.38 billion euros ($1.66 billion).
Still, Fosun’s 24.60 per-share bid of Club Med — which owns 70 holiday resorts in 26 countries, and employs around 13,000 people — is considerably lower than the stock’s closing price Friday of 25.09 euros ($30.13).