* Shareholders ADAM and CIAM said bid was too low
* AMF says bid will close on May 23
* Club Med shares closed 7.5 pct above bid level
* Gallion Invest says will not raise bid
(recasts with AMF, lawyer, Gallion quotes, shares)
By Dominique Vidalon and Matthieu Protard
PARIS, April 29 A bid for French holiday
operator Club Med by China's Fosun International
and French private equity firm Ardian will close next
month after a court rejected a shareholders' challenge that had
delayed the deal by nearly a year.
The Association for the Defence of Minority Shareholders
(ADAM) and Charity Investment Asset Management (CIAM) challenged
the offer on the basis that it was too low at 17.50 euros per
share and offered favourable terms to the management that has
agreed to it.
"The court rejected the CIAM and ADAM challenges" an
official from the team of Julien Visconti, the lawyer for CIAM,
told Reuters by phone on Tuesday.
It was not immediately clear if they would appeal.
Dominique Gaillard, the head of Gallion Invest, the
investment vehicle making the bid, welcomed the Paris court
But he reiterated that Gallion will not raise its bid even
though Club Med shares were trading 7.5 percent above the offer
price and there was "a risk" the bidders do not secure the 50
percent of the capital required for the offer to go through.
Visconti said in an e-mail that since Club Med stock trades
above the offer price, that could signal investors will not
tender their shares and believe there is more to gain in not
taking part in the offer.
Fosun and Ardian, the former Axa Private Equity, initially
planned on offering 17 euros, but revised their offer to 17.50
euros in June 2013.
The bid for Club Med - headed by chief executive Henri
Giscard d'Estaing - opened on July 17, 2013, and was due to run
until Aug. 30, but was extended until further notice after
shareholders issued a legal challenge.
French stockmarket watchdog AMF said on Tuesday that the bid
would close on May 23.
Club Med shares have gained nearly 9 percent so far this
year, giving the company a market value of 602 million euros.
The shares closed down 0.4 percent at 18.84 euros on
Tuesday, having set a five and a half year-high of 18.99 euros
earlier on Tuesday before the court decision was known.
According to a banking source, hedge funds have been
propping up Club Med's stock in recent weeks to force Ardian and
Fosun to raise their offer.
Founded in 1950 and listed since 1966, Club Med was a
pioneer of the all-inclusive holiday resort.
But it fell on hard times in the past decade because of
stiff competition and an unsuccessful expansion into services,
and its more recent drive to recast itself as an upmarket
operator has been hampered by a flagging European economy.
Fosun, with a 9.96 percent stake, and Ardian, with 9.4
percent, have said they wanted to accelerate Club Med's shift to
fast-growing emerging markets like China.
Shareholders represented on the board and holding a combined
14.9 percent of Club Med capital have said they would tender
their shares to the raised bid.
Because the buyers themselves hold a combined 19.33 percent
stake, this means they have already secured 34.23 percent of
Club Med's capital.
(Reporting by Dominique Vidalon, additional reporting by
matthieu Protard; Editing by Erica Billingham)