Fosun International 2015

Abstract

In June 2013, Guo Guangchang’s Fosun International announced their first call of bidding $641.1 million ($19.5 per share) for Club Med, a private all-inclusive holidays company headquartered in France. Meanwhile, Andrea Bonomi, an Italian investor in private equity made a formal public statement about a new proposal of $24.2 per share, valuing the company at more than $909 million. The announcement intrigued the French market analysts, one of whom said that ‘there is no economic logic to paying such a price’. Virtually all of them reacted negatively to Bonomi’s decision claiming that the company was highly overvalued and wondering what did Bonomi or Guangchang see in the declining French resort operator that others did not. Yet, Fosun spent a total of $11.0 billion, since 2010, and proved, through a number of various successful international acquisitions, to be a distinguished investor in many industries. In fact, the company’s investment strategies led to more than 93% 1-year return. After Bonomi’s move, the question facing Guangchang was whether to continue the bid or leave the battle. As the head of a conglomerate that developed its model of investment under the value of linking China’s economic growth to the globalized resources and which made most of its fortune from long-term investment strategies, Guangchang had to move quickly before Bonomi and his partners sign the contract.

Detailed information