Italian tycoon Andrea Bonomi‘s private equity veichle Investindustrial, together with his new ally Kkr, raised as expected his bid on Club Méditerranée (see a previous post by BeBeez).
Through the controlled newco Global Resorts, the two funds and their partners bought over-the-counter more than 2.1 million shares of Club Med at a price of 23 euro per share buying them from Tyrus Capital Sam and Boussard&Gavaudan, two investment funds who have been piling up long positions on Club Med shares for the last few months (download here the press release).
At that price Club Med’s equity is valued 874 million euros which is a value that overtakes the one Chinese conglomerate Fosun and its allies are paying in their current 22 euro bid due to end next November 20th. Fosun launched its bid last October through Gallion Invest II (a veichle controleld by Fosun and partecipated by French private equity fund Ardian and by touristic operators U-tour and Docas Investimentos) and by Portuguese insurance company Fidelidade (controlled by Fosun) (download here the Offer Prospectus).
The French Supervisory Authority on Financial Markets (AMF) explains in a statement (download here AMF’s statement) that yesterday’s acquisition by Global Resorts trigger an automatic increase (see articles 231-39 I and 232-9 of the General Regulations of the AMF) of the price offered in Global Resorts’ offer launched last August on Club Méditerranée shares from 21 euro to 23 euro per share, while no other changes have been made to the conditions of Global Resorts’ offer, which remain identical to those contained in the Offer Prospectus (download here AMF’s statement of last August and the Offer Prospectus). It’s AMF now that has the task to communicate a possible change in the two offers’ timetable.
So, from a technical point, of view Bonomi’s counter-bid it’s not a new takeover bid but simply the same bid launched last August by Global Resorts at a higher price. Global Resorts is controlled by International Resorts Holding sca, which in turn was then a veichle 90% owned by Investindustrial’s funds and 10% owned by two international operators in the tourism and hotel sector ( South African entrepreneur Sol Kerzner and Brazilian GP Investments) together with management of PortAventura, a big theme parke in Spain owned by Investindustrial and Kkr together.
The news is that International Resorts Holding sca has now Kkr among its shareholders so now Investindustrial and Kkr control together a 91.5% stake (with Kkr owning a minority stake) and the rest remaining in the hands of the previous partners.
Global Resorts acts in agreement with Strategic Holdings sarl. The latter is the investment veichle owned by the Bonomi family through its BI-Invest holding which in turn is the principal investor in Investindustrial’s funds.
Thanks to yesterday’s deal, Global Resorts and Strategic Holdings own now 5,7 million shares of Club Med representing a 15.9%stake in Club Med’s capital or 13.3% of its voting rights. Moreover Global Resorts said yesterday that it reached an agreement to acquire additional shares from Boussard&Gavaudan which would increase its stake in Club Méditerranée up to 6,785,369 Club Méditerranée shares, representing 18.9% of the share capital and 17.0% of the voting rights of the company.
The price offered for bonds convertible and/or exchangeable into new or existing shares (OCEANEs) of Club Méditerranée is unchanged
at €22.41 (coupon attached) per OCEANE. However, holders of these securities are entitled to convert their OCEANEs at any time at a conversion ratio of 1.065 and to tender the resulting shares to the offer and therefore to benefit from the automatic increase of the share price to 23 euro per share (which implies a price of 24.495 euros per OCEANE on the basis of the conversion ratio of 1.065).
The total amount of the transaction for 100% of the Club Méditerranée shares and OCEANEs, including the shares owned by Strategic Holdings and persons acting in concert with it, is equal to 874 million euros, and to 914 millions including all fees, costs and expenses incurred in connection with Global Resorts’ offer.
Assuming a 100% tender rate, that amount will be financed for 644 millions by equity from Global Resorts and will be financed for the remaining 270 million euros by a term loan issued by Banca Imi and Unicredit.