* French private equity firm AXA, China's Fosun team up
* Offer to be 17 euros a share, 23 pct above Friday's close
* China to be Club Med's second-largest market by end-2015
* Shares jump 22 pct to near proposed bid price
(Adds quotes, details from news conference, updates shares)
By Dominique Vidalon
PARIS, May 27 Club Mediterranee's top
shareholders plan to take over the French holiday firm in a bid
that values it at around 541 million euros ($700 million), to
accelerate its shift to fast-growing emerging markets.
Chinese investor Fosun International and AXA
Private Equity said on Monday they would team up with
management to offer 17 euros a share for the stock they do not
already own - a 23 percent premium to Friday's closing price.
Chief Executive Officer Henri Giscard d'Estaing, who has
spearheaded Club Med's upmarket shift and expansion away from
recession-hit Europe, said the friendly bid would give the group
the group freedom to focus on emerging markets.
"We need to be free from short-term constraints for the next
four to five years," he said.
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.
One Paris-based trader, who declined to be named, said
Fosun's involvement would help Club Med's achieve its aim to
make China its second-biggest market after France.
Club Med aims to operate five villages in China by 2015,
including three by the end of this year, Giscard d'Estaing said.
Beyond China, Club Med is speeding up expansion in Russia
and Brazil, with the goal to lift the contribution of emerging
markets to sales to 33 percent by 2015 from around 25 percent.
At 1355 GMT, Club Med shares were up 22.4 percent at around
the proposed 17 euros offer price, but well short of its 2007
high of almost 50 euros.
Club Med, which operates around 70 resorts, said it would
appoint a committee of independent directors to assess the
offer, which is expected to be filed in the next few days.
The bid comes as travel firms and airlines across Europe
have seen bookings fall in recent months.
Club Med said on Monday operating income at its holiday
villages in the first-half ended April 30 fell 6.4 percent.
Bookings in Europe over the last eight weeks were down 4.6
percent, mostly due to a weak French market, while they jumped
13.9 percent in Asia. Net debt at the end of April stood at 112
million euros, down from 123 million a year ago.
Club Med competes with global hoteliers Intercontinental
and Accor, as well as tour operators TUI
Travel and Thomas Cook.
The move does not necessarily signal a new wave of takeovers
in the sector, according to Christian Jimenez, who heads the
Diamant Bleu Gestion fund.
This is "a very specific takeover," he said. "Fosun was
already in the capital and intended to raise its stake and Club
Med's management backs the deal."
AXA Private Equity holds 9.4 percent of Club Med, while
Fosun owns 9.96 percent.
Giscard d'Estaing, who became CEO in 2002 and who is the son
of former French President Valery Giscard d'Estaing, is also
taking part in the deal. He currently owns less than 0.01
percent of the share capital. He will remain CEO if the takeover
goes ahead, with Michel Wolfovski remaining deputy CEO.
Control of Club Med will exercised through a joint venture
that will be 46 percent owned by Fosun, 46 percent by Axa
Private Equity, and 8 percent by 400 Club Med managers.
Should the buyers secure 95 percent of Club Med, they
reserve the right to squeeze out other shareholders.
Dominique Gaillard, managing director of Axa Private Equity,
said that after four years, shares may also be listed in Hong
($1 = 0.7734 euros)
(Additional reporting by Alexandre Boksenbaum-Granier; Editing
by Mark Potter and Louise Heavens)