French all-inclusive resort operator Club Med is to be taken over in a deal worth €556 million.
The company’s two biggest shareholders lodged the friendly bid as Club Med reported a drop in bookings from Europe.
Sales in the six months to the end of April fell 2.5% to €763 million, after dropping 6% in France and 3% in the rest of Europe. Sales in the Americas and Asia rose by 6% and by 4% respectively. Bookings from the UK were down by 2%.
Paris-based Axa Private Equity and Fosun, China’s largest private conglomerate, which already own 19% of the shares, are joining the company’s management to offer €17 a share – a 23% premium to Friday night’s close of €13.85, the Financial Times reported.
Shares in Club Med jumped 22% yesterday on news of the takeover offer, ending at €16.95.
Chief executive Henri Giscard d’Estaing described the offer as a stroke of “good luck” that would give Club Med breathing space to press ahead with plans to move upmarket and expand in fast-developing economies. It plans five resorts in China, of which one is open.
Club Med aims for Chinese holidaymakers to become its second-largest customer base by the end of 2015 as part of a goal to reduce European sales to two-thirds of the total.
Axa and Fosun, which have been shareholders since 2011, said Club Med needed “to be free from short-term constraints” for its strategy given the “difficult trading environment of the tourism market in Europe, in particular France”.