Italian tycoon Bonomi tops Chinese offer for Club Med

Reuters

Paris/Milan

Italian tycoon Andrea Bonomi raised his takeover bid for Club Mediterranee to €24 a share yesterday, trumping a €23.50 offer for the French holiday group from Chinese billionaire Guo Guangchang.

Bomomi’s latest move in France’s longest-running takeover battle values the loss-making holiday group at €915mn ($1.13bn). It is the seventh offer its investors have been asked to consider since May last year when Guo offered a low-ball €17 a share.

Shares in Club Med traded 2.3% higher at €24.3 at 1510 GMT, a sign that some investors expect the bidding to go higher. Bonomi had previously bid €23 per share.

Guo, through his Shanghai-based conglomerate Fosun, said he was “reviewing the situation”.

The saga has been running so long that Club Med executives have voiced concerns about the impact on a business founded in 1950 and a pioneer of the concept of the all-inclusive holiday.

Stock market regulator AMF has already stepped in to the process to accelerate it and force the bidders to respond more quickly. Yesterday it announced that any counterbid from the Guo would have to be in by 1700 GMT on December 19.

The company is suffering from tough competition in the holidays sector, weak growth in Europe where it does most of its business, and a stalled attempt to take itself upmarket.

Both Guo and Bonomi see turnaround potential in the business and potential growth in emerging markets, especially China. The company’s management has consistently backed Guo’s offer.

Club Med’s stock has gained 37% so far this year and over 70% since Fosun made the first offer in May 2013.

In 2000, Club Med shares traded above 140 euros. It was around then that some of its current difficulties began.

Each side has built similar, rival stakes in the company. As of December 1 Bonomi had 18.9% and Guo 18.3%.

The AMF has the right to further shorten the offer periods and can cut them as low as three days to try to hasten an end to the saga. It also has the right to demand sealed bids by a fixed date and award the prize to the highest bidder.