(Adds quotes from union representatives after meeting)
By Dominique Vidalon
PARIS, July 10 Club Mediterranee
suitor Andrea Bonomi met trade unions on Thursday to outline his
plan for the French holidays group, but did not convince staff
representatives worried about possible job cuts.
Bonomi is now the largest shareholder in the company that
pioneered all-inclusive holidays after building a stake of
nearly 11 percent this year. He is offering 21 euros a share for
Club Med, valuing it at 790 million euros ($1.1 billion).
The Italian tycoon's offer tops a one year-old 557 million
euros offer by China's Fosun International and French
private equity group Ardian. That offer was priced at 17.50
euros a share but became mired in legal challenges and
shareholder opposition to it as too low.
Bonomi must convince Club Med shareholders, staff and the
French establishment his offer is best for Club Med's future.
Part of his strategy to win support has been to promise
accelerated expansion in the country.
Unions were still unconvinced after the meeting.
"They tried to reassure us, saying there would be no
restructuring, no job cuts, but we remain very cautious. They
did not really explain how they would develop the Club," said
Force Ouvriere (FO) representative Etienne Dakiche, who attended
"At this stage we feel we lack elements to form an opinion
on the offer and we are going to ask for another meeting (with
the Bonomi camp) to get more details," he added.
Bonomi officials could not be immediately reached for
FGTA-FO trade union representative Dejan Terglav had told
Reuters by phone before the meeting: "Bonomi's offer is
attractively priced but there are fears he might tighten cost
cuts and cut jobs. We want to see how serious he is about
expanding in France."
FO is the main trade union at Club Med and has been backing
the lower Ardian-Fosun offer. It recently met with French
Economy Ministry officials to voice its concerns.
But it also plans to meet with foreign ministry officials in
the coming days. The foreign ministry took over responsibility
for tourism in a recent government reshuffle.
A diplomatic source told Reuters this week: "We are keeping
an eye on what is happening and talked to various players on all
Bonomi's offer notably faces opposition from Club Med's
Chairman and Chief Executive Henri Giscard d'Estaing - himself a
shareholder, and who would keep his job should Fosun and Ardian
win. He has played the patriotic card, saying a sale to Bonomi
would hand control of Club Med to foreign investors.
"Nobody is immune to Mr Giscard d'Estaing's lobbying. We are
following the subject very carefully. It's a major French
company that markets France and which many French holiday makers
are close to. However it is not for us to intervene. It is a
private listed company," the same diplomatic source said.
Giscard d'Estaing is the son of former president Valery
With a stock market value of 614 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.
A recent drive to reinvent itself as an upmarket operator
has been stifled by an economic downturn in Europe, which still
accounts for 70 percent of its revenue. The operating margin of
its holiday villages fell to 3.9 percent of sales in 2013 from
4.3 percent in 2012.
Fosun, with a 9.96 percent stake, and Ardian, with 9.4
percent, have said their plan is to accelerate Club Med's shift
towards China, which Club Med wants to make its second-biggest
zone after France by 2015.
Bonomi has said he believed the future of Club Med was not
solely in China but also in Europe and the Americas. He has also
warned against neglecting the cheaper end of the holiday market.
($1 = 0.7331 Euros)
(Additional reporting by John Irish; Editing by Andrew Callus
and Mark Potter)