The French market regulator AMF has extended from May 23rd to next June 6th the deadline for shareholders of Club Méditerranée to decide on French private equity firm Ardian and Chinese conglomerate Fosun International‘s 558 million euros takeover bid while it seeks clarity on the intentions of the new investor Strategic Holdings sarl in the holidays group.
The Fosun-Ardian offer at 17.50 euro per share, through their bid vehicle Gaillon Invest, has been much delayed by litigation and sits well below Club Med’s 19 euros-plus share price, a sign investors think it is unlikely to succeed. The stock was unchanged at 19.20 euros on Friday May 23rd. The Bonomi family has built a stake of more than 10 percent in Club Med, making it the largest investor  in Club Med’s shareholders capital. The last move was officialy taken last May 21st when Strategic Holdings bought 9.043 shares at 19.04 euros per share taking its position to a 10,655 pct stake in Club Med shareholders capital (download here the press release).
Strategic Holdings sarl, an investment veichle 100 pct owned by Italian wealthy Bonomi family’s BI-Invest holding, was given time till May 26 at 1600 GMT to answer to AMF’s request (download here the press release), AMF’s request comes after Italian and international press articles published last May 21st and 22nd  (see a previous post of BeBeez) telling  that BI-Invest didn’t rule out launching a takeover bid on Club Med’s shares if Ardian and Fosun’s offer hadn’t succeeded. The tender offer will suceed only if Club Med shares representing more than 50 pct will be delivered to the offer. At the moment share for just 34.23 pct have been delivered, included shares in Fosun and Ardian’s portfolio (a total of 19.33 pct).
Moreover in a setback for Gaillon on Friday May 23rd, the Paris Commercial Court dismissed its lawsuit against 2.1 pct Club Med shareholder, the Benetton family’s Edizione holding company. Gaillon had protested against Benetton’s decision to withdraw support for the bid. A spokesman for Edizione said the ruling was based on a view that the backing had never been qualified as irrevocable. Olivier Diaz, a lawyer for Gaillon Invest, confirmed Reuters the decision had gone against his client. He said Gaillon had yet to decide whether it would appeal.
A takeover bid’s deadline extension will permit Ardian and Fosun to raise their price offer if they want. French law allows to raise price offer till seven days before the deadline.
In the meantime Strategic Holdings sent out a press release on Thursday evening on May 22nd in order to clear out some issues after all the press articles. That press release partly answers to AMF’s requests already. First of all Strategis Holdings repeated that Investindustrial could think of launcing a takeover bid anly if Ardian and Fosun’s bid won’t succeed (download here the press release). Moreover Strategic Holdings points out that it cannot fix a fair price for CLub Med’s share as it wasn’t possibile for them to access all the data information needed for figuring out a valuation. However a price of 21-25 euro per share for Clud Med’s shares comes out if you compare market multiples of listed comparable holiday groups, which means a 650 million euros evaluation.
At actual price Club Med is valued at around 6x its ebitda, that is to say a rather low multiple for the sector, with a 2013 ebitda of 118 million euros (from 126 millions in 2012) and stable revenues of 1.48 billion euros. In the first semester ended last April ebitda was 85 million (from 81 millions in H1 2013) and revenues were 776 millions (from 758 millions).
