Italy's Bonomi challenges regulator on Club Med bid deadline

PARIS, June 23 Mon Jun 23, 2014 7:17am EDT

PARIS, June 23 (Reuters) - In a fresh twist to the battle for Club Mediterranee, Italian tycoon Andrea Bonomi is challenging a regulator's decision to set an end-June deadline for one of his funds to make a rival bid for the resort operator, or be banned for six months from doing so.

Club Med is already being courted by French private equity firm Ardian and Chinese conglomerate Fosun International , which together have made a 557 million euro ($756 million) offer for the French pioneer of the all-inclusive holiday resort.

The AMF watchdog said last month it would not set a closing date for the bid - a vital part of the regulator's handling of a bid process - until Bonomi decided whether he would make a counter offer, giving him until June 30 to clarify its position.

But Bonomi is challenging this stance.

"A request has been submitted," a spokesman for the Bonomi family's BI-Invest fund said on Monday, after Le Figaro daily said Investindustrial, one of the private equity funds led by Bonomi and part of BI-Invest, was challenging the AMF decision.

The spokesman gave no reason for the challenge and the AMF declined to comment.

A source close to the matter told Reuters the challenge had been filed with the Paris Court of Appeal and a decision was slated for July 2.

The watchdog had asked for clarity on Bonomi's intentions towards Club Med after another one of his funds, Luxembourg-based Strategic Holdings, became the company's top shareholder last month with a stake of nearly 11 percent.

Club Med said earlier this month it had received an "expression of interest" from Investindustrial on a possible offer and had given the fund access to its financial data. But so far Bonomi has not said if he would bid.

Strategic Holdings built its holding amid shareholder resistance to the Fosun-Ardian offer, which at 17.50 euros per share is well where Club med shares have been trading. They were down 0.4 percent at 19.17 euros by 1056 GMT.

DOORS OPEN

Ardian and Fosun have so far refused to raise their offer. They could not be immediately reached for comment on Monday.

Should Investindustrial choose not to bid for Club Med by 1600 GMT on June 30, it would be barred from making an offer for six months, the AMF has said, a situation Bonomi's lawyers argue would penalise their client, according to Le Figaro.

A source close to the matter said Bonomi's challenge reflected his reluctance to mount a bid for Club Med, while another source close to the situation said it was likely to be aimed at "leaving all doors open".

With a stock market value of 618 million euros and annual sales of 1.4 billion, Club Med competes with hoteliers including Intercontinental and Accor, as well as tour operators such as TUI Travel and Thomas Cook.

Its recent drive to reinvent itself as an upmarket operator has been stifled by an economic downturn in Europe, where it still makes 70 percent of its revenue. Club Med is expanding in fast-growing China, where it has three holiday villages after opening a third on Dong'ao island last week.

Fosun, with a 9.96 percent stake, and Ardian, with 9.4 percent, have said their plan is to accelerate Club Med's shift to China, which Club Med wants to make its second-biggest zone after France by 2015.

As a private equity investor, Bonomi has a record of reviving premium brands and reselling them for a healthy profit. He is known for buying motorbike maker Ducati in 2006 and selling it to Volkswagen's Audi in 2012 for about 860 million euros, three times the estimated initial investment.

Apart from deeming the Fosun-Ardian offer as too low, Bonomi has been tight-lipped on his plans for Club Med.

"From what Investindustrial knows about Club Med at this stage, it does not believe that the future of Club Med is solely in China. There is also the rest of Asia, Russia, the Middle East and Latin American families who travel more these days," a source close to the matter told Reuters. ($1 = 0.7366 Euros) (Additional reporting by Cyril Altmeyer; Editing by David Holmes)