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France approves Chinese takeover of Club Med

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France approves Chinese takeover of Club Med
Photo: Mauricio Padovani
17:48 CEST+02:00
A Chinese company's takeover of iconic French holiday firm Club Med came one step closer on Tuesday, after the French market authority approved a buyout by Chinese group Fosun and the French investment fund AXA Private Equity.

France's Autorité des Marchés Financiers said the improved offer of €17.50 per share by Fosun and French group AXA Private Equity, already the two main shareholders, was valid.

The board of Club Mediterranee, as the company is officially known, last month voted unanimously in favour of the friendly offer which values the business at €556.89 million ($732 million).

Club Med will remain a French company and majority control of its capital will remain in French hands.

The two bidders have sought to calm possible objections in French political circles that the company might come under Chinese control.

Club Med is a high-profile player in the French tourism sector which has successfully restructured despite financial crisis in Europe.

The company returned to profit in 2011 and has refocused its strategy, going up-market, increasing its international activities and aiming for substantial expansion in China.

In Asia, Club Med has been active in Japan for more than 20 years and also operates in Thailand, the Maldives, and in Bali, Indonesia.

Before the operation Fosun, which became a shareholder in 2010, was the biggest shareholder with just under 10 percent of the capital. AXA PE owned 9.4 percent of the shares.

At the time of the AMF announcement, Fosun and AXA held 34 percent of the company and must pass the 50 percent mark in order for the buyout to bee
deemed successful.

Colette Neuville, a representative for small shareholders in Club Med, has said stakeholders should resist taking up the offer as it failed properly to value Club Med's potential.

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