* Strategic Holdings raises Club Med stake above 10 pct
* Source says Strategic Holdings opposed Gaillon Invest bid
* Gaillon's offer for Club Med closes May 23
* Strategic Holdings' controller Bonomi may seek board seat
* Strategic Holdings says does not want control of group
(Adds Strategic Holdings regulatory filing)
By Dominique Vidalon
PARIS, May 20 A fund led by Italian businessman
Andrea Bonomi has become Club Mediterranee's
largest shareholder and will seek to join its board, further
clouding the prospects for a long-running takeover bid for the
French holiday firm.
The stakebuilding by Bonomi's Strategic Holdings comes after
another shareholder, Italy's Benetton family, last week removed
its support for the 557 million euro ($764 million) offer,
launched a year ago by China's Fosun International and
French private equity firm Ardian via an investment vehicle
called Gaillon Invest.
A source close to the matter told Reuters the latest share
purchase by Bonomi's Strategic Holdings was "a way to torpedo
the takeover offer."
Gaillon's 17.50 per share offer is due to close on May 23,
and needs 50 percent support.
Gaillon so far has more than 30 percent acceptances, but the
offer has hit legal challenges from shareholders who want more
money and is less than the current stock market value of Club
The fund said in a regulatory filing on Tuesday that it
would continue to raise its stake after increasing it to 10.07
percent on Monday. It said it was not seeking to take control of
the company or force a change in its strategy, but had the
funding to buy a further 10 percent.
Club Med declined to comment. Gaillon Invest said it was
waiting for Strategic Holdings to clarify its intentions.
Fosun, with a 9.96 percent stake, and Ardian, with 9.4
percent, have said they want to accelerate Club Med's shift to
fast-growing emerging markets such as China to counter weak
growth in Europe.
Strategic Holdings bought an additional 427,635 Club Med
shares at 18.96 euros each on May 19, raising its total stake to
3.36 million shares, the filing said. Strategic Holdings said it
now holds 9.05 percent of Club Med's voting rights.
"Strategic Holdings wants to work with Club Med's management
and may continue to buy more shares as it believes this company
has a future," a source close to BI-Invest, the parent company
of Strategic Holdings, told Reuters on Tuesday.
Club Med shares closed up 0.7 percent at 19.10 euros each,
their highest level since 2008.
A French court on April 29 rejected a shareholder challenge
to Gaillon's offer that had delayed it for almost a year. The
shareholders, led by the Association for the Defence of Minority
Shareholders (ADAM) and Charity Investment Asset Management
(CIAM), had challenged it on the basis that it was too low.
Gaillon has also taken legal action against the Benetton
family after it removed its backing for the bid and added the
weight of its 2 percent stake to those demanding a higher price,
a source familiar with the matter said on Sunday.
Founded in 1950 and listed since 1966, Club Med was a
pioneer of the all-inclusive holiday resort.
The Gaillon bid came at the end of a tough decade for the
business, one of stiff competition and in which it made an
unsuccessful expansion into services. Its more recent drive to
recast itself as an upmarket operator has also been hampered by
a weak European economy.
($1 = 0.7289 Euros)
(Reporting by Dominique Vidalon, Matthieu Protard and Andrew
Callus; Editing by Erica Billingham)