China's Fosun International plans $500 million IPO of tourism business: IFR

HONG KONG (Reuters) - Chinese conglomerate Fosun International 0656.HK is in talks with banks to list its tourism business, which includes French resort chain Club Med, to raise at least $500 million, IFR reported on Thursday, citing people familiar with the situation.

A company logo of Fosun International is seen at the Fosun Fair held alongside the annual general meeting of the Chinese conglomerate in Hong Kong, China May 28, 2015. REUTERS/Bobby Yip/File Photo

Fosun Tourism & Culture Group includes a Chinese joint venture with tour operator Thomas Cook Group and a luxury hotel in Hainan province as well as Club Med, according to IFR, a Thomson Reuters publication.

Shanghai-based Fosun is considering spinning off the unit as early as next year and is likely to pick Hong Kong as the listing venue, according to the people. Two sources said the deal would raise at least $500 million, according to IFR.

Fosun declined to comment when contacted by Reuters.

Fosun, co-founded by Chinese billionaire Guo Guangchang, was in the vanguard of China’s global dealmaking spree over the past few years, snapping up assets including a Portuguese insurer, and stakes in Greek jewelry retailer Folli Follie and Cirque du Soleil. It bought Club Med for $1 billion in 2015 after a protracted bid battle.

The float of Fosun’s tourism unit is one of several expected from China’s largest dealmakers as they rationalize portfolios and seek to boost their finances. Last week, fellow conglomerate HNA said it was considering listing Gategroup, the Swiss airline caterer, in Zurich next year and signaled it was looking at other asset sales.

Fosun itself announced plans last year to list Ironshore, its reinsurance unit, but was stalled by a U.S. review of its two-stage acquisition of the Bermuda-based group. It sold the company to U.S. insurer Liberty Mutual for $3 billion last December.

In September, it listed Israeli subsidiary Sisram Medical in Hong Kong through a HK$ 977 million ($125.06 million) IPO. Sisram is a producer of medical aesthetics devices.

Fosun divides its businesses into “Health”, or pharmaceutical and medical-related, “Wealth” for its financial operations, and “Happiness” for its tourism, leisure and consumer units. In the first half of this year, the Happiness unit reported profits of 516 million yuan ($78.01 million) from sales of 6.53 billion yuan.

Fosun shares were trading at HK$15.78 on Thursday afternoon, giving the company a market capitalization of HK$135 billion.

($1 = 6.6148 Chinese yuan renminbi)

($1 = 7.8124 Hong Kong dollars)

Reporting by Jennifer Hughes; Editing by Muralikumar Anantharaman