China’s Fosun in talks to sell stake in Club Med to Singapore’s CapitaLand

Singapore’s CapitaLand Investment is in advanced talks to buy a minority stake in luxury resort chain Club Med from its Chinese owner Fosun International, according to people with knowledge of the matter.

The real estate investment firm, part of Temasek Holdings-owned conglomerate CapitaLand Group, is seeking to acquire from 20 to 30 per cent of the hotelier for several hundred million euros, the people said, asking not to be identified because the information is private. The Singaporean firm has emerged as the likeliest buyer for the stake after outbidding other rivals including private equity firms, the people said.

Talks are still ongoing, and no final decisions have been made, the people said.

Shares of CapitaLand Investment rose as much as 2.8 per cent to the highest intraday level since February 2 before closing up 2.4 per cent. Fosun Tourism’s stock jumped as much as 9.3 per cent, the steepest gain in more than two months, but closed up 1.6 per cent. Fosun International rose 1.3 per cent before paring gains and closing unchanged.

Fosun has stepped up efforts to cut its debt burden, including asset disposal and reduced borrowing. Progress on that front has helped it become one of the few Chinese conglomerates to witness a recovery in global investor confidence in recent years.

Backed by billionaire Guo Guangchang, Fosun owns Club Med through its listed leisure arm Fosun Tourism Group. Club Med is known for its all-inclusive resorts offering a range of leisure activities from fine dining and massages to yoga, scuba diving and baby gym classes. It operates more than 60 resorts globally in destinations including the French Alps and the Maldives, according to its website.