Posted by: youngragingbull | May 27, 2013

Club Med to be bought out in $700M deal

Club Med’s top shareholders plan to acquire the holiday firm in a bid that values it at roughly 541 million euros ($700 million).

Chinese investor Fosun International and AXA Private Equity said on Monday they would team up with management to offer 17 euros a share for the stock they do not already own – a 23 percent premium to Friday’s closing price.

CEO Henri Giscard d’Estaing, who has spearheaded Club Med’s upmarket shift and expansion away from recession-hit Europe, said the friendly bid would help accelerate the company’s shift to fast-growing emerging markets where more opportunities exist.

Founded in 1950 and listed since 1966, Club Med was a pioneer of the all-inclusive holiday resort. However, in recent years the company has suffered from economic conditions in Europe and greater competition abroad.

Henri Giscard d’Estaing said Club Med aims to expand aggressively in BRIC nations, starting with China. It aims to operate five villages in China by 2015, including three by the end of this year.

Additionally, the company wants to speed up expansion in Russia and Brazil, with the goal of emerging markets contributing to 33 percent sales by 2015 from 25 percent.

Club Med, which operates around 70 resorts, said it would appoint a committee of independent directors to assess the offer, which is expected to be filed in the next few days.

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