China Forms TPG Duet In Cirque Du Soleil Bid
One of China's biggest conglomerates is backing a bid by the American buyout giant TPG to win control of Cirque du Soleil, the live entertainment company which is one of Canada's most prominent global exports.
Sky News has learnt that Fosun International, which recently snapped up a 5% stake in the tour operator Thomas Cook, has joined forces with TPG to bid for the globally renowned performance troupe.
Final bids were lodged for Cirque du Soleil last week, according to people close to the process, with the Fosun-TPG bid up against a rival offer from CVC Capital Partners and Providence Equity Partners, two private equity firms.
The two bids are understood to be for a controlling stake in Montreal-based Cirque du Soleil despite initial indications that Guy Laliberte, its founder, was hoping to sell only between 20% and 30% of the company.
If TPG's bid is successful, the presence of a Chinese partner such as Fosun could help Cirque du Soleil to make a significant impression in China, one of a number of prospective growth markets that it has been looking to break into.
Fosun and TPG have worked together before, most notably last year on a takeover of Chindex International, a China-focused hospital operator which was listed in New York.
The Chinese conglomerate has made a significant impact in the global leisure and tourism sector, having recently led a takeover of Club Med, the international holiday resort group.
The auction of a stake in La Cirque du Soleil, which has earned a reputation for staging some of the world's most spectacular live shows, comes after it has recently fallen on tougher financial times.
Set up by street performers in Quebec in 1984, Cirque du Soleil describes itself as offering "a dramatic mix of circus art and street performance".
Millions of people have seen the company's range of hit shows in London, which have been staged at the Royal Albert Hall for more than a decade, and other cities including Las Vegas.
Notable for its daring acrobatics and flamboyant costumes, Cirque du Soleil was valued at $2.7bn when Mr Laliberte sold a 20% stake to Istithmar World, the investment arm of Dubai World, and Nakheel, a Dubai-based real estate developer, in 2008.
However, after Dubai was forced into a sovereign debt restructuring, Mr Laliberte bought back part of the stake he had sold in a transaction valuing Cirque du Soleil at just $2.2bn.
Analysts and company executives have reportedly said that the company expanded too quickly, spending over-zealously on new performers, executives and shows in a way which diluted the brand's international distinctiveness.
Reports had suggested that Live Nation Entertainment, IMG and AEG Live, were also likely to submit offers for Cirque du Soleil, although it was unclear whether any had done so.
Goldman Sachs is handling the auction for Cirque du Soleil.
The decision by CVC and Providence to bid jointly is intriguing because the two firms are pitched against each other in an unrelated auction of Stage Entertainment, a European theatre operator.
Providence is a big shareholder in Ambassador Theatre Group, which is seen as the leading contender to buy Stage.
TPG declined to comment on Thursday.
