Chinese conglomerate Fosun International 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 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, 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.
Reuters