December 7, 2018 / 5:36 AM / 8 days ago

Club Med's Chinese owner Fosun Tourism raises $428 million in HK IPO

HONG KONG (Reuters) - China’s Fosun Tourism Group, operator of the Club Med holiday business, on Friday said it has raised $428 million in its initial public offering (IPO), pricing shares at the bottom of a marketed range.

FILE PHOTO: Qian Jiannong (C), chief executive officer of Fosun Tourism Group, poses by a Foliday sign with other executives at a news conference on its proposed IPO in Hong Kong, China November 29, 2018. REUTERS/Julia Fioretti/File Photo

Fosun Tourism, part of conglomerate Fosun International Ltd (0656.HK), sold 214.2 million shares at HK$15.60 ($2.00) each, the bottom of an indicative range of HK$15.60 to HK$20.00.

The deal values Fosun Tourism at $2.44 billion, a stock exchange filing showed.

The amount raised could increase to $492 million if a greenshoe, or over-allotment option, is exercised within one month of the start of trading.

Hong Kong is on track for a bumper year of listings, with $33.2 billion raised so far, showed data from Refinitiv. But performance has been largely poor with several firms, including big names such as Meituan Dianping (3690.HK) and Xiaomi Corp (1810.HK), trading below IPO prices.

Concerns over a China-U.S. trade war and slowing growth in the world's second-biggest economy have weighed on markets, with Hong Kong's benchmark Hang Seng index .HSI down more than 12 percent this year.

Chinese medical tech platform WuXi AppTec Co Ltd (603259.SS) also priced its Hong Kong listing on Friday, raising $1.01 billion as it sold shares at the middle of its indicative range.

Fosun Tourism, which includes Club Med, as well as a luxury resort in the southern Chinese seaside city of Sanya, is looking to develop new resorts in China and elsewhere as it bets on a continued rise in Chinese tourism.

It opened its $1.74 billion Atlantis Sanya resort in April, in a province known as China’s Hawaii and targeted by the government for tourism development.

Tourism is a profit growth driver for parent Fosun International, which bought control of Club Med in 2015 for 939 million euros ($1.07 billion) after what was then France’s longest takeover saga lasting almost two years.

The conglomerate was co-founded by Guo Guangchang, China’s self-styled version of U.S. billionaire investor Warren Buffett. It reorganized its businesses in 2016, creating Fosun Tourism.

Fosun Tourism booked a loss of 295 million yuan ($42.5 million) in 2017 and 135 million yuan in the first half of this year, its listing prospectus showed.

Citigroup, CLSA and JP Morgan are the IPO’s joint sponsors.

Shares will begin trading on Dec. 14.

($1 = 0.8789 euros)

($1 = 7.8123 Hong Kong dollars)

Reporting by Julia Fioretti; Editing by Christopher Cushing

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