AXA deal hangs on legal appeal

AXA Private Equity and Chinese powerhouse Fosun’s takeover of Club Med has been delayed by an appeals court hearing.

Due to a prolonged legal process, AXA Private Equity and Fosun will have to wait until at least March before their bid to takeover French resort operator Club Méditerranée can go through. 

AXA Private Equity declined to comment. Fosun was unable to respond to a request for comment by press time.

The two firms offered €17.50 per share, equal to a total bid of €557 million, which was accepted by Club Med's board in June. But minority shareholders CIAM, a merger arbitrage fund, and Adam, a French minority shareholders’ association, launched an appeal to stop the deal in July. 

French courts set the appeal date as February 27, more than six months after the appeal was launched. Club Med noted in a statement that the French stock market regulator “promised to defer the closing of the tender offer at least eight days after the court judgement”, meaning the deal cannot close until at least March.

CIAM appealed on the grounds that the offer price is too low, and valuation experts used to price the offer were not sufficiently independent from AXA Private Equity.

The structure of the takeover also raises concerns over conflicts of interest, according to a statement from CIAM. Under the terms of the takeover, AXA and Fosun’s stake would increase to a combined 92 percent from about 19.3 percent, with the remaining 8 percent held by Club Med’s management.

AXA and Fosun originally offered €535 million for all Club Med shares and securities in May but that offer was deemed too low by stakeholders.