PARIS (Reuters) - Club Mediterranee’s CMIP.PA top shareholder, Andrea Bonomi, on Monday outbid French private equity firm Ardian and Chinese conglomerate Fosun International (0656.HK) with an offer for the resort operator, valuing it at 790 million euros ($1.1 billion).
Investindustrial, the private equity fund led by Italian tycoon Bonomi, said it offered 21 euros per share and 22.41 euros per convertible bond for the 64-year-old all-inclusive holiday pioneer.
The deal represents a 22 percent premium to the existing year-old 17.50 euro-a-share offer by the Franco-Chinese alliance and ends weeks of suspense over Bonomi’s intentions.
“This is a medium and long-term industrial deal which will financially satisfy shareholders and is accompanied by an ambitious strategic plan,” 48 year-old Bonomi told a news conference in Paris.
As a private equity investor, Bonomi, the scion of a wealthy Italian family, 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 (VOWG_p.DE) Audi in 2012 for about 860 million euros, three times the estimated initial investment.
Investindustrial, which Bonomi founded in 1990, initially focused on southern Europe. Its investments range from exclusive carmaker Aston Martin to Spanish theme park PortAventura.
France’s AMF stock market watchdog had asked for clarity on Bonomi’s intentions towards Club Med after another of his funds, Luxembourg-based Strategic Holdings, became the company’s top shareholder with a stake of nearly 11 percent.
AMF had given Investindustrial until 1600 GMT on Monday to make a rival bid or be banned for six months from doing so.
Ardian and Fosun had offered 557 million euros for Club Med.
Bonomi had built his Club Med stake amid resistance to the Fosun-Ardian offer, which at 17.50 euros per share is well below the 19 euros where Club Med shares have been trading.
Colette Neuville, of small-shareholders association ADAM, who had unsuccessfully tried to block the Ardian-Fosun deal in court, said: “The counter-bidding game is open. Let the best offer win, whether it is Gaillon, Bonomi or a third player.”
Gaillon Invest, the investment vehicle of the Ardian-Fosun alliance, which has so far refused to raise its Club Med offer, said on Monday: “We will study the project and its terms.”
“TENDER LOVING CARE”
Describing Club Med as “an icon in need of tender loving care”, Bonomi said his offer would see 150 million euros of additional investment in Club Med to speed up its development, notably in France, with 5,000 additional beds and six new holiday villages.
The bid is made by Global Resorts SAS, which is 90 percent owned by Investindustrial, with the remainder held by South African entrepreneur Sol Kerzner, GP Investments and the management of Barcelona theme park operator PortAventura.
With a stock market value of 614 million euros and annual sales of 1.4 billion, Club Med competes with hoteliers including Intercontinental (IHG.L) and Accor (ACCP.PA), as well as tour operators such as TUI Travel TT.L and Thomas Cook (TCG.L).
A 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. The operating margin of its holiday villages fell to 3.9 percent of sales in 2013 from 4.3 percent in 2012.
Against that backdrop Club Med has been expanding in fast-growing China, where it has three holiday villages after opening a third on Dong‘ao island in a bid to tap a rapidly growing local middle class.
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 said on Monday, however, he believed the future of Club Med was not solely in China but also in Europe and the Americas.
“China is important, but a company cannot stake its entire future on a single country,” he said.
He also told journalists Club Med’s all-inclusive offers should be improved with “a la carte” products and its governance changed, as he would seek to split the chairman and chief executive positions.
Club Med shares were suspended on Monday ahead of the announcement and last traded at 19.51 euros. They will resume trading at 1000 GMT on Tuesday.
Reporting by Dominique Vidalon and Pascale Denis; Editing by Astrid Wendlandt, Susan Fenton and David Evans