PARIS: The two main shareholders in up-market holiday group Club Mediterranee, including a Chinese firm, said on Monday that they would make a bid for the company, driving Club Med shares up 22.53 percent to 16.97 euros.
The two bidding companies, AXA Private Equity and Chinese conglomerate Fosun, said that their bid would be friendly and involved top managers of Club Med.
The bid would be pitched at 17 euros per share, representing a premium of 28.4 percent on the average price of the share over a month, the two bidders said in a statement.
The terms value the holiday company at about 540.6 million euros ($700 million).
Club Med has been through difficult times and a refocusing of its strategy, and the financial outlook for the business now looks strong despite a depressed economic climate in Europe.
At the same time, Club Med reported a 7.1-percent rise in net profit for the first six months of its financial year to 18 million euros, and said that the level of bookings for the holiday season in Europe was higher than at the same time last year.
In 2012, Club Med made a net profit of 2 million euros, and its operating margin was unchanged.
The statement on Monday said that the proposed bid would enable shareholders to benefit from action to move the company up market, and would enable the business to enter a new phase of development.
This would mean speeding up the strategy for developing the business in emerging markets and for strengthening its position in mature markets, which would involve the opening of new holiday villages.
The board of Club Med said that it noted that the bid was friendly but that it would give its assessment of the offer later.
AXA PE and Fosun said that if their bid succeeded, Henri Giscard d’Estaing would remain chief executive and Michel Wolfovski would remain general manager.
The shareholdings held by the two bidders and Giscard d’Estaing account for about 19.33 percent of the capital and 24.87 percent of the voting rights.
AXA PE and Fosun said that if they obtained the support of 95 percent of the share votes, they would de-list Club Med from a stock exchange quotation.
Fosun is the biggest single shareholder in Club Med, having become a shareholder in 2010 and owning 9.96 percent of the equity and 8.48 percent of voting rights. AXA PE owns 9.4 percent of the equity and 16.48 percent of the votes. Giscard d’Estaing owns less than 0.01 percent of the capital.