AXA PE joins forces with China’s Fosun to sponsor MBO for Club Mediterranee

French private equity firm AXA Private Equity and Chinese conglomerate Fosun International Limited (HKG:0656), holding 9.4% and 9.96% in Club Mediterranee SA (EPA:CU) respectively, said they were in talks with the management to buy the French travel firm via a joint bid.

The companies plan to offer Club Mediterranee’s securities holders EUR17.00 per share and EUR19.23 per bond convertible in or exchangeable for new or existing shares of the target, they said.

According to Reuters, the bid values the target at some EUR541m (USD699.4m).

The launch of the offer is subject to entering into agreements with CEO Henri Giscard d’Estaing and chief financial officer Michel Wolfovski and the subscription of credit facilities. The buyers said they would control the target via a joint venture, in which Fosun and AXA PE will hold 46% each, whereas Club Med’s 400 managers will take an 8% stake, including the 1.6% stake of Giscard d’Estaing and Wolfovski, in return for an EUR8m investment.

The bid is conditional upon an acceptance level of 50.1%. If the buyers secure 95% of the target, they may launch a squeeze-out bid for the remaining stake, they added.

The bid is seen to help the company speed up its development strategy in emerging markets on the back of difficult tourism market in Europe, and especially in France. AXA PE and Fosun commented that together they would support the development of Club Mediterranee, in particular in Asia, and consolidate its positions in Europe, helping it become a leader in all the markets where it operates.

The offer will be funded with stock and cash, as well as through the subscription of credit facilities.