Club Med improved EUR 17.50 per share offer insufficient, ADAM says

Date: 26 Jun 2013

It was reported here in May 2013 that AXA Private Equity (AXA PE) and the Chinese group Fosun International Ltd.(Fosun) joined forces with the management of Club Méditerranée (Club Med) to acquire the rest of Club Med’s shares by announcing a takeover bid offer of €17 (US$21.98) a share.

In recent days, these bidders have reportedly increased their offer per share to €17.5, which was not warmly received by some, including the head of the French Association of Minority Shareholder (ADAM), Colette Neuville, who replied that the effort is “insufficient”.

Despite such lukewarm reception, AXA PE and Fosun indicated that some Club Med shareholders – e.g., Caisse de Dépôt et de Gestion du Maroc, Rolaco and Edizione - have already expressed their commitment to accept the offer. Taken together, these three investors own 14.9% of Club Med’s share capital.

Combining this with the Club Med equity already owned by the bidders would push the total guaranteed acceptance to 34.23% of the total share capital. In this regard, the offer by the Chinese buyers included a condition that the offer must achieve a 50% minimum acceptance share capital as well as voting rights.

Sources close to the story reveal that many Club Med investors were already very happy with the bidder’s first offer of €17 per share. For one such investor, the offer price increase provides a significant premium relative to the price it paid for the shares several years ago. Another source also pointed out that many other shareholders are also ready to decide on the offer now.

On the contrary, Neuville is advising Club Med shareholders not to sell until AXA PE merges with Fosun in four to five years in order to obtain an even higher premium.

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