Bonomi’s $1.1 Billion Club Med Bid Trumps China-Backed Offer

Jun 30, 2014 12:28 pm ET

(Adds comment from Bonomi in fourth paragraph.)

June 30 (Bloomberg) -- Funds associated with Italy’s Andrea Bonomi offered 21 euros a share for Club Mediterranee SA in a bid that’s 20 percent higher than an earlier Chinese-backed offer for the French holiday resort operator.

The proposal from Investindustrial Development values Paris-based Club Med at 790 million euros ($1.1 billion) when including a 22.41 euros a share offer for a convertible bond, it said today in the French capital after indicating on May 27 that a bid was being prepared.

The offer pits former Banca Popolare di Milano Scarl chairman Bonomi against rival Club Med shareholder Ardian Sarl - - the former Axa Private Equity -- and its backer in a tussle for one of Europe’s best-known tourism names amid higher demand for upmarket holidays. The proposal follows five weeks of due diligence and a request from the French market regulator for Investindustrial to either make an offer or walk away by today.

“China is important, but the company can’t place all its future in one country,” Bonomi said at a press conference, adding that his proposal is “more balanced” than the 17.50 euros-a-share bid from Ardian and China’s Fosun International Ltd., which was put on hold by regulators pending his offer.

Trading in Club Med stock was halted in Paris with the shares priced at 19.51 euros, a 12 percent gain this year.

‘Shaken Up’

Bonomi, who already owns about 10 percent of the French company, made his bid via Global Resorts SAS, in which Investindustrial has a 91 percent stake, with the remainder owned by South African billionaire Sol Kerzner, management of Spanish amusement park operator PortAventura and private-equity company GP Investments of Brazil.

Revenue management at Club Med “must be shaken up,” Bonomi said at the press conference, adding that the company must improve the quality of its services while maintaining entry-level offerings.

Gaillon, a bid vehicle created by Ardian and Chinese investment company Fosun, made an initial 17-euros a share offer a year ago, seeking to remove Club Med from the spotlight of capital markets to accelerate a turnaround. The offer was sweetened by 50 cents a month later.

Investindustrial already holds leisure-industry assets via PortAventura, which plans to build a park dedicated to the Ferrari SpA auto brand at its resort near Barcelona. Another theme destination, Gardaland, situation on the shares of Lake Garda, was sold at the end of 2006.

Investindustrial also sold Italian motorcycle maker Ducati Motor Holding SpA to Volkswagen AG two years ago, and in May sold helicopter-services company Avincis to Babcock International Group Plc. The company continues to own a stake in luxury carmaker Aston Martin Holdings UK Ltd.