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AXA Private Equity, China's Fosun Floats Friendly Offer For Club Méditerranée

French insurer AXA SA's (AXAHY) investment arm and Chinese conglomerate Fosun International Ltd. have offered to acquire French resort operator Club Méditerranée SA for 17 euros or $21.98 per share in a bid to expand the resort network to emerging markets and to boost market shares in mature markets.

Club Méditerranée's largest shareholders, AXA Private Equity and Fosun, have teamed up with the management of Club Méditerranée to float a friendly tender offer to acquire the remaining shares and securities that they do not own. The deal reportedly values the resort operator at about 550 million euros or $710 million.

AXA Private Equity and Fosun have decided to involve the managers of Club Méditerranée in order to implement a strategy in line with the difficult environment of tourism market in Europe, in particular in France.

Dominique Gaillard, member of the executive committee of AXA Private Equity, stated, "We are very happy to support Club Méditerranée for this new step of its development. We have been working with the management for two years to accelerate its strategy worldwide. With this project, we wish to pursue this work in the long term, thanks to our international footprint and the support we provide to the management."

The offer reflects a 23.3 percent premium over Club Méditerranée's closing price of 13.79 euros on Friday in Frankfurt. It also represents a 28.4 percent premium over the volume-weighted average price of Club Méditerranée shares over the past 30 days.

The companies noted that the offer would lapse in the event that securities tendered to the offer does not exceed the threshold of 50 percent of the share capital and voting rights of the company. The company will also continue to be listed on the Paris Stock Exchange if at least 95 percent of the shares are not tendered to the offer.

This will include the holdings of AXA Private Equity, Fosun and Club Méditerranée CEO Henri Giscard d'Estaing, son of former French president. The group together owns about 19.33 percent of the outstanding share capital and 24.87 percent of the voting rights.

The offer will provide immediate liquidity to all of the shareholders of Club Méditerranée, valuing the upmarket repositioning of the group.

"I am convinced that together with AXA Private Equity and the current management, we have the means to face short-term uncertainties to support the development of Club Méditerranée, in particular in Asia, and consolidate its positions in Europe. Fosun will be a strong support to the development of Club Méditerranée," Jiannong Qian of Fosun added.

Following the proposed deal, Giscard d'Estaing will continue to be CEO of Club Méditerranée and Michel Wolfovski will continue to be Deputy CEO. Meanwhile, AXA Private Equity and Fosun would indirectly hold the same percentage of shareholding.

Club Méditerranée shares closed Monday's regular trading session in Frankfurt at 16.87 euros, up 3.60 euros or 27.11% on a volume of 6,512 shares.

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by RTT Staff Writer

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