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(BN) Goldman Partners Profit From Private Funds That Charge No Fees

Goldman Partners Profit From Private Funds That Charge No Fees
2014-11-11 06:00:17.196 GMT

By Michael J. Moore
Nov. 11 (Bloomberg) -- Of all the perks bestowed on those
selected as Goldman Sachs Group Inc. partners this week, the
most uncommon may be access to a private fund named for a street
that stretches two blocks at the southern tip of Manhattan.
Goldman Sachs has brought back Bridge Street funds, which
allow senior employees to invest alongside the bank in closely
held companies without having to pay fees. First offered when
the firm was a true partnership before going public in 1999,
Bridge Street was restarted in 2011. This year’s fund raised
more than $120 million from about half of the 400 partners.
Employee private-equity funds are one of the extras that
make rewards at Goldman Sachs the envy of Wall Street. Chief
Executive Officer Lloyd C. Blankfein received $125.9 million
from the funds in the past five years, more than he was awarded
in salary and bonuses over the same period, filings show.
“It’s consistent with Goldman’s past DNA and the DNA they
want to have going forward,” said Alan Johnson, founder of New
York-based compensation-consulting firm Johnson Associates Inc.
“The big banks are no longer the pay leaders, no longer the
masters of the universe, so they’ve got to be more creative.”
Andrea Raphael, a spokeswoman for Goldman Sachs, declined
to comment on the funds.
Goldman Sachs offered Bridge Street funds until 2000,
before dropping that model in favor of allowing employees to
invest in specific private-equity and debt funds it raised for
clients, such as the $20 billion GS Capital Partners VI in 2007.
The opportunity, which in some years attracted more than $1
billion, encouraged employee retention and was a built-in
seeding method for new ventures.

Volcker Rule

The bank didn’t offer employees any funds in 2009 and 2010
in the wake of the financial crisis and amid criticism of Wall
Street compensation practices.
The Volcker Rule -- passed as part of the 2010 Dodd-Frank
Act -- limited the amount of money banks could put into their
private-equity funds. As Goldman Sachs replaced stakes in funds
with investments in companies made solely with its own money, it
went back to the standalone employee funds.
This year, the New York-based bank also reactivated Stone
Street, a fund offered to the firm’s more than 2,000 managing
directors, those employees one rung below the ceremonial title
of partner. That fund raised at least $57 million, bringing the
total contributed by employees to more than $178 million, about
three times as much as in 2011, according to filings.
Stone Street is one block north of Bridge Street in
Manhattan’s financial district. Both are near Goldman Sachs’s
former headquarters at 85 Broad St.

Override Fees

The Bridge Street and Stone Street funds are managed by
Goldman Sachs’s merchant-banking division, which is led by
Richard Friedman and also runs the firm’s client funds. The bank
typically doesn’t charge partners management fees or overrides,
the manager’s cut of gains, often called carried interest.
The employee funds raise questions about conflicts of
interest similar to those posed by the firm’s principal
investments. Goldman Sachs hasn’t disclosed the criteria it uses
to decide when to invest client funds in a company versus using
its own balance sheet or employee funds.
“The negative of things like this is clients always wonder
if you’re saving the best stuff for yourselves,” Johnson said.
“So you’ve got to be careful with that and let them know that
clients either come first or are beside us in the deals, but
we’re not ahead of the clients.”
Goldman Sachs also often serves as underwriter on IPOs for
companies in which it has invested, leading competitors to
question whether the firm will push for a higher price than the
market would dictate.

Stemming Defections

Banks including Morgan Stanley and Citigroup Inc. haven’t
made private-equity funds broadly available to employees since
2008. Those two firms offered funds before the financial crisis
in which it leveraged employee contributions by lending $2 to
the fund for every $1 committed, allowing bankers to benefit
from profits made beyond the cost of the loan.
Goldman Sachs’s employee funds are modeled on those of
hedge funds and asset-management firms, which often reinvest a
portion of annual bonuses in their funds, said Ilana Weinstein,
founder of New York-based recruiting firm IDW Group LLC.
The efforts might not be enough to stem defections of some
traders seeking higher pay and less regulation, Weinstein said.
The average amount Goldman Sachs set aside last year for
compensation per employee was $383,374, down from $661,490 in
2007. The firm’s partners typically receive a $900,000 salary
and often earn many times that in bonuses.

Bonus Amounts

“If the objective is to try to retain senior people from
leaving to go to the buy side, the structure is similar to what
goes on in asset-management land, but the absolute dollar
numbers are going to be smaller,” Weinstein said. “I don’t
know if you stay just because you can participate in those
funds.”
Goldman Sachs’s eligible workers are alerted to the funds
early in the year as they learn their bonus amounts, according
to current and former employees who asked not to be identified
talking about compensation policies. They can choose to set
aside a portion of their bonus to invest in the funds, and the
money is put to use over several years.
The newest partners will be notified of their selection
tomorrow morning by Blankfein and President Gary D. Cohn,
according to a person briefed on the process.
Even with the recent increases in contributions, the amount
invested by Goldman Sachs employees pales compared with the pre-
crisis funds. Bankers at the firm contributed more than $1.5
billion to employee funds tied to Capital Partners VI in 2007
and more than $1 billion to funds tied to Capital Partners V two
years earlier, filings show.

Investing Risks

The reduction may be because the financial crisis exposed
the risks of investing in the funds. Some that invested
alongside real estate funds before the housing market collapsed
lost money. The funds also aren’t liquid. General Counsel Greg
Palm and Jon Winkelried, then co-president of the firm with
Cohn, found that out when they needed cash in late 2008. The
firm ended up buying their stakes.
Still, individual contributions have been capped because
demand for the funds often outpaced their targeted size.
Contributions are locked up for several years and distributions
can continue over more than a decade.
Former CEO Hank Paulson had between $3.6 million and $7.6
million in 22 Bridge Street and Stone Street funds from the
1990s and 2000 as of the end of 2005, according to public
financial disclosures from when he became U.S. Treasury
Secretary the following year.

Blankfein Benefit

While the firm doesn’t provide details of the funds’
performance, bankers who have participated said that previous
employee funds have performed well, in some cases more than
doubling the amount invested.
Blankfein, 60, has received $173.4 million from employee
funds in the past 12 years. Palm and Cohn also have received
more than $100 million of distributions. Goldman Sachs doesn’t
disclose how much of that is profit and how much return of
invested capital.
The return to employee-only funds eliminates one added
bonus from the previous structure: Bankers who invested in the
earlier funds also received a share of the fees that the firm
charges outside clients. Blankfein and Palm, the two largest
investors in employee funds among the firm’s officers, have
received more than $9 million of such gains since 2008.

T2 Biosystems

The recent funds have made several profitable investments.
Bridge Street 2011 funds were involved in a buyout that
year by Goldman Sachs and Warburg Pincus LLC of Endurance
International Group Holdings Inc., one of the world’s largest
website-hosting companies. Burlington, Massachusetts-based
Endurance went public last year, and the stake held by Bridge
Street funds has gained more than 40 percent, according to data
compiled by Bloomberg.
In March 2013, that year’s Bridge Street fund made a
preferred investment alongside Goldman Sachs in Lexington,
Massachusetts-based T2 Biosystems Inc., a maker of diagnostic
instruments for detection of infectious diseases. Seventeen
months later, Goldman Sachs and Bridge Street bought more stock
in T2’s IPO. The fund’s total investment of $4.34 million has
increased more than 50 percent in value, based on yesterday’s
closing price.
Bridge Street funds also own preferred shares in iKang
Healthcare Group Inc., a Beijing-based company that provides
health-care services to corporations, and have stakes in credit-
reporting company TransUnion Corp., Indian cable-television
operator DEN Networks Ltd. and Interline Brands Inc., which
sells plumbing and air conditioning products.
“Historically these kinds of funds have done well,” said
Johnson, the pay consultant. “And even when they haven’t done
well, people kind of sucked it up and didn’t complain.”

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To contact the reporter on this story:
Michael J. Moore in New York at +1-212-617-6919 or
mmoore55@bloomberg.net
To contact the editors responsible for this story:
Peter Eichenbaum at +1-212-617-5722 or
peichenbaum@bloomberg.net
Robert Friedman, David Scheer

>>> Club Med likely to receive EUR 23-per-share counteroffer off

The listed, French holiday resorts operator Club Mediterranee is likely to receive a counteroffer of EUR 23 per share from Investindustrial and private equity fund KKR, Italian-language daily Il Messaggero reported.

The unsourced article noted that Investindustrial will make the bid via its Global Resorts vehicle in the next few hours.

The counteroffer will be made against Fosun, which has already launched a EUR 22 per share public offer via its Gallion II vehicle. Investindustrial has until 13 November to counter the current bid made by Fosun for Club Med, the item noted.

Investindustrial was able to go ahead with the offer after reaching an agreement Unicredit and Intesa Sanpaolo, which are financing the operation. The item added that Investindustrial is being advised by Lazard and Cleary Gottlieb.

Investindustrial is controlled by Andrea Bonomi, the report added.

Club Med has a market cap of EUR 837m.

Source Il Messaggero

>>> US After Hours

After Hours Summary: MODN +14.5%, LLNW +12%, RAX +3.7%, ERII -19.7%, CALL -11.3%, CZR -5.4% following earnings/guidance

After Hours Gainers: Companies trading higher in after hours in reaction to earnings: MODN +14.5%, LLNW +12%, ATW +8.9%, SAAS +8.1%, DTSI +8.1%, TC +7.1%, ICUI +6.7%, FMSA +5.6%, RAX +3.7%, OMEX +3.2%, PTLA +2.4%, ESPR +2.1%, PDLI +2%, APP +2%, OMER +1.8%, NBR +1.1%, DMD +0.7%, RMTI +0.6%, WWD +0.4%, CIM +0.3%, FSIC +0.2%, DPLO +0.2%, PBYI +0.1%

Companies trading higher in after hours in reaction to news: ANIK +5.7% (announced that the Center for Medicare & Medicaid Services has assigned a unique Healthcare Common Procedure Coding System code, or J-Code, to its product MONOVISC), PBF +5.0% (Baupost Group disclosed 10.37% passive stake in 13G filing), RAX +3.7% (Board authorized $500 mln share repurchase over next two years, co expects a $200 mln accelerated repurchase; co also reported earnings),

After Hours Losers:

Companies trading lower in after hours in reaction to earnings: ERII -19.7%, VSLR -13.5%, CALL -11.3%, HALO -10%, ARTX -9.6%, CMLS -9.1%, HK -8.9%, UNIS -5.7%, FPRX -5.7%, CZR -5.4%, AAOI -4.3%, W -4%, HEAR -3.9%, FXEN -3.2%, EGY -2.7%, ZOES -2.7%, ACAD -2.5%, MACK -1.8%, CLUB -0.9%, NPSP -0.6%, TGTX -0.4%

Companies trading lower in after hours in reaction to news: DVAX -7.7% (files for a $200 mln mixed securities shelf offering; co also disclosed it entered into an at the market issuance Sales Agreement with Cowen under which the co may offer and sell from time to time at its sole discretion shares of its common stock up to $50 mln), CODI -5.7% (announced public offering of 6 mln trust shares), FPRX -5.7% (filed for $100 mln offering of common stock), SFM -5.5% (announced the launch of a public offering of 15 mln shares of its common stock held by affiliates of Apollo Global Management), LOCK -5.4% (disclosed that various financial statements previously filed with the SEC should no longer be relied upon), LOCO -5.4% (filed for an offering of 6 mln shares of common stock by selling stockholders), MCEP -4.7% (announced public offering of 5.8 mln common units), NNN -2.1% (announced offering of 4 mln shares of common stock), ISIS -2.0% (announced proposed offering of $425 million of convertible senior notes)

WSJ :U.S., China to Drop Tariffs on Range of Tech Products

U.S., China to Drop Tariffs on Range of Tech Products

Agreement to Expand Pact Could Cover $1 Trillion in Trade

BEIJING—The U.S. and China reached an agreement to drop tariffs on a wide range of technology products, in a deal that its backers say could cover $1 trillion in trade and that marks a significant accomplishment amid strained ties between Beijing and Washington.

The two countries late Monday reached a deal to expand the Information Technology Agreement, a global technology trade pact, to cover semiconductors, medical devices, Global Positioning System devices and other newer products, U.S. Trade Representative Michael Froman said Tuesday in Beijing. The deal--reached late Monday after marathon negotiations and more than a year of stalled talks--could be ratified in December by members of the World Trade Organization in Geneva, Switzerland.

U.S. President Barack Obama unveiled the deal Tuesday morning at a gathering of leaders of the Asia-Pacific Economic Cooperation summit in Beijing, which began Monday night. He said the U.S. and China reached an “understanding” on the pact that it “will contribute to a rapid conclusion to the broader negotiations in Geneva.”

The issue of whether certain tariffs will be phased in over time, as China wants, would be resolved in Geneva, Mr. Froman said.

The agreement is a rare mark of progress in a U.S.-China relationship that is fraught with challenges across many fronts—from cybersecurity and human rights to Beijing’s territorial disputes with U.S. allies Japan and the Philippines. Economic ties—for many years the foundation of relations—have been rocky, too, over the past decade, with disputes over trade imbalances, China’s tightly managed currency and, more recently, Chinese antitrust investigations into marquee U.S. companies including Microsoft Corp.

Struck on the eve of a two-day summit between Mr. Obama and Chinese President Xi Jinping , the deal would lend momentum to talks that analysts expected would yield little in the way of major breakthroughs.

“This is encouraging news for the U.S.-China relationship,” Mr. Froman said.

The U.S., the European Union and Japan have been pushing to update the deal, which was originally struck in 1997 to curb tariffs in the technology industry. But China had been reluctant to go along, negotiators say, in part because of its desire to protect and build its semiconductor industry.

U.S. and Chinese negotiators conducted exhaustive trade talks on the margins of the Asia-Pacific Economic Cooperation forum in Beijing to get a deal. The U.S. had been counting on the desire of China, as the host country of APEC, to be able to chalk up concrete results.

The U.S. also argued that a deal on technology would help convince the administration and members of Congress that China could show enough flexibility to eventually reach a far more complex investment treaty that the two nations have made a priority. A U.S.-China summit between Messrs. Obama and Xi, which is set to begin Tuesday evening after the APEC forum ends, will focus in part on that investment pact, known as the Bilateral Investment Treaty.

The new technology deal would include 200 different tariff categories. Among the products that would see tariffs eliminated are next-generation semiconductors, which now have tariffs as high as 25%; magnetic resonance-imaging, or MRI, machines, which face tariffs of up to 8%; and GPS devices, which also have tariffs as high as 8%, the U.S. said.

Talks over the technology pact had nearly broken down over its scope, Mr. Froman said, but “last night we reached a breakthrough.” The agreement, while not final, would eliminate tariffs on sales of roughly $1 trillion and could generate as many as 60,000 U.S. jobs, he said.

The U.S.-China deal would be presented to the 54 economies involved in the ITA negotiations in Geneva to get their signoff. U.S. officials said they believe they are all expected to do so because Chinese opposition has been seen as the main obstacle and the U.S. has already consulted with other nations.

Formally, the ITA comes under the jurisdiction of the WTO. ITA members must offer the same tariff deals to all WTO members. But the ITA was an APEC initiative years ago and the APEC summit in Beijing, which includes such high-tech powerhouses as the U.S., Japan, China and South Korea, was seen by negotiators as a good place to complete negotiations on an expansion, which have dragged on for more than a year.

The deal is also a win for the WTO, which has seen one negotiating effort after another end in stalemate. The U.S. said the ITA would be the first major tariff-cutting deal at the WTO in 17 years.

(BN) Chevron Said to Plan Biggest Energy Bond Deal Since Oil Plunge

Chevron Said to Plan Biggest Energy Bond Deal Since Oil Plunge
2014-11-10 19:16:41.36 GMT

By Katherine Chiglinsky
Nov. 10 (Bloomberg) -- Chevron Corp. the second-largest
U.S. oil and gas producer, plans to sell benchmark-sized bonds
today in what would be the biggest offering by an energy company
since oil prices began plunging to a four-year low.
The company may issue $4 billion in a six-part offering
with both floating-rate and fixed-rate securities, according to
a person with knowledge of the transaction who asked not to be
identified, citing lack of authorization to speak publicly.
Brent crude oil prices dropped to the lowest level in four years
at $81.63 a barrel Nov. 5, according to data compiled by
Bloomberg.
The bond sale would be Chevron’s first since it issued $6
billion of notes in June 2013, Bloomberg data show. The recent
slump in oil has affected investment-grade energy companies less
than high-yield, Deutsche Bank AG credit strategists Oleg
Melentyev and Daniel Sorid wrote in a note Nov. 7.
Investment-grade energy companies remain in “relatively
healthy shape from a leverage and coverage ratio standpoint
going into the oil price correction,” Melentyev and Sorid wrote
in the note.
The bond offering may be used to help refinance some of the
San Ramon, California-based company’s debt including commercial
paper borrowings, according to a regulatory filing today.
Moody’s Investors Service rates Chevron Aa1, while Standard
& Poor’s grades it one one level lower at AA.

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To contact the reporter on this story:
Katherine Chiglinsky in New York at +1-212-617-9330 or
kchiglinsky@bloomberg.net
To contact the editors responsible for this story:
Shannon D. Harrington at +1-212-617-8558 or
sharrington6@bloomberg.net
Faris Khan, Mitchell Martin

>>> US Close Dow +0,23% S&P+0,23% Nasdaq+0,41% Russell +0,43%

Closing Market Summary: Small Caps Lead Stocks Higher

The stock market began the new trading week on an unassuming note with the key indices registering modest gains. The S&P 500 added 0.3% while Russell 2000 (+0.5%) outperformed.

Equity indices began the trading near their flat lines after the overnight session did little to change investor sentiment. China's Shanghai Composite stood out, soaring 2.3%, after it was confirmed that the Shanghai-Hong Kong exchange link will begin operating on November 17.

Domestically, the S&P 500 resisted some mild selling efforts during the opening hour, but was able to advance alongside the biotechnology group. The iShares Nasdaq Biotechnology ETF (IBB 295.20, +5.06) gained 1.7% while the health care sector (+1.0%) settled in the lead despite starting among the laggards. Dow component Merck (MRK 58.81, -0.53) lost 0.9% after reporting disappointing trail data, but that had little impact on the sector.

Like health care, the remaining countercyclical groups started in the red, but ended with gains. The consumer staples sector added 0.4% with Dean Foods (DF 16.40, +1.98) surging 13.7% after beating bottom-line estimates and guiding Q4 earnings above consensus.

Elsewhere, the six cyclical sectors ended mixed with respect to the market. Technology (+0.3%) struggled at the start, but was able to end in-line with the S&P 500 amid strength in chipmaker names. The PHLX Semiconductor Index settled higher by 0.8% with just four names registering losses.

Similarly, industrials (+0.5%) and financials (+0.5%) finished ahead of the market while consumer discretionary (-0.1%) and energy (-0.8%) spent the bulk of the session in the red.

The discretionary sector was sent to lows during morning action after President Obama said the Federal Communications Commission should regulate the internet like a utility. The news pressured internet service providers with Charter Communications (CHTR 146.62, -9.75), Comcast (CMCSA 52.95, -2.20), and Time Warner Cable (TWC 136.50, -7.10) losing between 4.0% and 6.2%.

Meanwhile, homebuilders prevented the sector from registering additional losses. The iShares Dow Jones US Home Construction ETF (ITB 24.79, +0.24) rose 1.0% with Toll Brothers (TOL 32.96, +0.74) jumping 2.3% after issuing strong guidance for the fourth quarter.

For its part, the energy sector started in the lead, but slid to the bottom of the leaderboard with crude oil adding pressure. The energy component fell 1.4% to $77.26/bbl. Greenback strength presented a headwind with the Dollar Index (87.81, +0.16) erasing its overnight loss to end higher by 0.2%.

Treasuries retreated throughout the session, sending the 10-yr yield higher by six basis points to 2.36%.

Participation was in-line with long-term averages as 700 million shares changed hands at the NYSE floor.

Investors did not receive any economic data of note and tomorrow's session will also be quiet on the economic front. Also of note, the bond market will be closed for Veterans Day.

Nasdaq Composite +11.4% YTD

S&P 500 +10.3% YTD

Dow Jones Industrial Average +6.3% YTD

Russell 2000 +1.4% YTD

(BFW) Covidien Holder Vote on Medtronic Deal Set for Jan. 6

BFW 11/10 21:03 MORE: Covidien/Medtronic Holder Votes Set for Jan. 6

Covidien Holder Vote on Medtronic Deal Set for Jan. 6
2014-11-10 20:54:12.980 GMT

By Joshua Fineman
Nov. 10 (Bloomberg) -- Covidien holders of record Nov. 18
can vote on the Medtronic deal: Bloomberg data.
* COV wasn’t immediately available to comment to Bloomberg
First Word
* NOTE: Nov. 5, Covidien Can’t Give Timing on Holder Votes for
Medtronic Deal
* NOTE: Nov, 7, Medtronic/Covidien Deal Chances ‘Nearly 100%’:
BTIG
* COV/MDT spread $7.12 vs $8.21 on Nov. 7

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To contact the reporter on this story:
Joshua Fineman in New York at +1-212-617-8953 or
jfineman@bloomberg.net
To contact the editor responsible for this story:
Arie Shapira at +1-212-617-1488 or
ashapira3@bloomberg.net

>>> ISIS Pharma : Announces Proposed Offering of $425M of Convertible Senior Not

Announces Proposed Offering of $425M of Convertible Senior Notes

- Announced today that it intends to offer, subject to market and other considerations, $425.0 million aggregate principal amount of Convertible Senior Notes due 2021 (the "Convertible Notes") in a private placement. Isis also intends to grant to the initial purchasers of the Convertible Notes a 30-day option to purchase up to an additional $63.75 million aggregate principal amount of the Convertible Notes, solely to cover over-allotments, if any.

- Concurrently with this offering, Isis intends to use a portion of the net proceeds of the offering to repurchase up to $140.0 million principal amount of its outstanding 2 3/4% Convertible Senior Notes due 2019 (the "2019 Notes") through individually negotiated transactions with holders of such 2019 Notes. Any repurchase of the 2019 Notes could have the effect of raising or maintaining the market price of Isis' common stock above levels that would otherwise have prevailed or preventing or retarding a decline in the market price of its common stock. In addition, following this offering, Isis intends to use the remainder of the net proceeds to develop select drugs in its pipeline to later stages of development prior to partnering, to further develop and potentially commercialize the drugs in its lipid franchise and for general corporate and working capital purposes.- The Convertible Notes will be general unsecured senior obligations of Isis and will accrue interest payable semiannually in arrears. The Convertible Notes will be convertible under certain circumstances, and Isis will settle conversions of the Convertible Notes by paying or delivering, as the case may be, cash, shares of its common stock or a combination of cash and shares of its common stock, at its election. The interest rate, conversion rate and other terms of the Convertible Notes will be determined at the time of pricing of the offering.

(ZH) BofA: "Change Your Thinking On Gold" Friday Marked The End Of A 4 Year

BofA: "Change Your Thinking On Gold" Friday Marked The End Of A 4 Year Decline

For the week ahead, BofAML's MacNeil Curry is focused on the plight of the USDollar, US Treasuries, and commodities; especially gold and oil. All of these markets, he warns, are showing signs of changes in trend. Most notably, Curry explains, we are switching gears on gold from bearish to bullish, "Friday's gains are just the beginning."

Via BofAML's MacNeil Curry,

Gold: Friday's gains are just the beginning

Change your thinking on Gold.

Friday's Bullish Reversal / Bullish Engulfing Candle marks the end of a 4yr decline and the beginning of a medium term bull trend.

Initial targets are seen to 1241/55 ahead of 1345 and potentially as far as 1433.

Buy dips.

* * *

And positioning has shifted to a notable bearish position...

* * *

So far no good as gold and silver are giving back Friday's gains...

FT : Bonomi in talks with KKR for Club Med bid

Bonomi in talks with KKR for Club Med bid

Any new bid by Italian investor Andrea Bonomi would have to leave Fosun's offer in the shade by 2 per cent

Italian investor Andrea Bonomi is in talks with US private equity group KKR as part of a last-minute attempt to win control of Club Mediterranée, sources close to the matter have told the FT.

Bringing KKR in as a minority partner would pit Mr Bonomi directly against China’s Fosun International, renewing a gruelling east-west tug-of-war over the French holiday operator.

Club Med shares jumped 3.6 per cent on Monday to close at €23.30 as investors appeared to welcome the prospect of yet another round in the struggle to gain control of the French company.

Sources close to the matter told the FT that Mr Bonomi and KKR were still in talks and that there was no guarantee of finalising an agreement before a deadline set by France’s stock market regulator of this Thursday afternoon.

KKR declined to comment.

Sources close to Fosun on Monday cast doubt on KKR’s interest, arguing that Mr Bonomi had unsuccessfully approached the private equity group as part of his first offer, which he made at the end of June.

KKR holds 49.9 per cent of PortAventura, an amusement park and entertainment complex in Spain that is controlled by Mr Bonomi’s Investindustrial group.

According to French rules, a new bid by Mr Bonomi would have to be at least 2 per cent higher than Fosun’s September offer of €22 per share, which valued Club Med at €839m.

Fosun said it would make its offer through Gaillon Invest II, a vehicle comprising Fosun, French private equity group Ardian, Club Med’s management, and U-Tour, a Chinese online travel agent.

The bid substantially increased Fosun’s planned participation in Club Med compared with a previous offer it submitted last year with the Paris-based Ardian.

At the same time, Fosun confirmed that it had bought all of the roughly 9 per cent of Club Med shares that Ardian had held, raising Fosun’s stake to about 18 per cent of the French group.

Founded in 1950 by a Belgian water polo player, Club Med has become one of the best-known brands in the global travel industry, offering the all inclusive-style getaways that it pioneered. But the group has suffered at the hands of stiff competition since the 1990s.

In September, Fosun said it would seek to return the group to high growth by winning market share in mature territories but also accelerating expansion in emerging markets such as China, Russia and Brazil.

Fosun’s offer topped a previous €21-per-share bid by Global Resorts, a partnership vehicle bringing together Mr Bonomi’s Investindustrial, Brazilian investment company GP Investments and South African hotel magnate Sol Kerzner.