China's Fosun explores sale of minority stake in $800 mln Club Med -sources

Fosun Tourism

05/02/2024 07:25

By Kane Wu and Julie Zhu
       HONG KONG, Feb 5 (Reuters) - Chinese conglomerate Fosun
International  0656.HK  is exploring the sale of a minority
stake in its luxury resort chain Club Med, targeting a valuation
of $800 million for the whole business, according to two people
with knowledge of the matter.
    Fosun has been in informal discussions with potential buyers
and advisers about the sale in recent months, but no firm bid
has emerged, said the two sources and a third person with
knowledge of the matter.
    Fosun could sell as much as a 30% stake in Club Med, said
one of the sources.
    The sources declined to be named because the discussions are
confidential.
    Fosun and Club Med did not immediately respond to requests
for comments.
    In November 2022, Bloomberg reported Fosun was informally
fielding interest in Club Med based on a full-business valuation
of $1.5 billion. At the time, Fosun said it had "no plans" to
sell the all-inclusive resort operator.
    Its more recent exploration of a sale of minority stake
comes as the property-to-healthcare conglomerate has doubled
down on divesting non-core assets amid investor concerns about
its debt levels. 
    The conglomerate said last month it planned to sell a 5.60%
stake in Portuguese lender Banco Comercial Portugues  BCP.LS 
for 235.19 million euros ($256.07 million) to boost its working
capital. 
        Fosun is also in advanced talks to sell its Thomas Cook
package holiday brand to Polish online travel agent eSky, Sky
News reported last month. Fosun bought the business for 11
million pounds ($13.87 million) after it collapsed in 2019.
    Fosun Tourism Group  1992.HK , the conglomerate's Hong
Kong-listed tourism entity that runs resorts assets including
Club Med and the Atlantis luxury resort in China's tropical
Hainan Island, has a market value of about $652 million.
    Fosun bought Paris-based Club Med in 2015 in a deal that
valued the chain at about 939 million euros. It now runs nearly
70 resorts around the world in popular destinations such as the
Maldives, Hokkaido and Cancun, according to Club Med's website.
    Club Med's total sales for the first three quarters of 2023
reached about 12 billion yuan ($1.67 billion), up 21.3% and
16.8% compared to the same period in 2022 and the pre-pandemic
year of 2019, respectively, Fosun Tourism said in October. 
    Fosun's move to sell a minority stake in Club Med comes as
global tourism is expected to fully recover from the pandemic
this year.
    The United Nations' World Tourism Organisation said this
month that increased global air connectivity and a strong
recovery of Asian markets would allow a full rebound of tourism
activities worldwide this year, despite geopolitical instability
in the Middle East and elsewhere.
    ($1 = 0.7929 pounds)

 (Reporting by Kane Wu and Julie Zhu; Editing by Jamie Freed)
 ((kane.wu@thomsonreuters.com; +85228436590; Reuters Messaging:
kane.wu.thomsonreuters.com@reuters.net))