Club Med basks in takeover sun to buck gloom

 
Michael Bow
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CLUB Mediterranee, the global hotel chain which popularised the package holiday, yesterday said it was poised for a €541m (£463m) takeover by two of its biggest international shareholders, Chinese conglomerate Fosun and Axa Private Equity.

Club Med, which rose to prominence in the 1960’s and now competes with tour operators like Tui Travel and Thomas Cook, said it had taken note of the so-called friendly nature of the offer, which has the backing of the company’s management.

The €17 a share offer is at a 23 per cent premium to the company’s share price on Friday, before the bid was announced. Shares in the company closed up 22.38 per cent after trading yesterday.

The move could mark a turnaround in the European package holiday sector, which has been hit hard in recent years, with recessions across Europe curtailing consumer spending.

Both Tui and Thomas Cook have suffered losses, but are now starting to rebound along with Club Med.

Club Med, which yesterday posted revenues of €783m for the six months ending April from its resorts across the world, said the takeover would help it move more towards customers in emerging markets.

Chief executive Henri Giscard d’Estaing, the son of ex-French President Valery Giscard d’Estaing said: “We need to be free from short-term constraints for the next four to five years.”

Giscard d’Estaing, who took over as boss 11 years ago, will remain in the top job if the takeover bid is accepted by other minority shareholders.

TIMELINE: HISTORY OF CLUB MED

Package holiday operators 1950
Belgian water polo champion Gerard Blitz gets the idea for a holiday club while staying in a tent in Corsica at the Olympic Club village. The firm is based in Paris, France.

1955-56
The first Club Meds are set up in Tahiti and Switzerland. Customers can take out 18 month interest-free loans to pay.

1965-66
The King of Morocco Hassan II helps the company set up a site at Agadir, giving Club Med its first permanent year-round site. A year later, the company lists in Paris.

1968
Blitz moves into America with a camp at Guadeloupe. French art group Situationist International immortalises the firm with the graffiti piece “Club Med: A cheap holiday in other people’s misery”.

1980
Club Med’s rise to dominance shows no signs of slowing with openings in Malaysia, Brazil, Saudi Arabia and Mexico.

1989
Club Med launches its first floating resort – a 187 metre long five mast ship for 450 passengers.

2002
Son of ex-French President Henri Giscard d’Estaing takes over as CEO at the firm