(Yicai) Dec. 12 -- Shares of China’s Fosun Tourism Group surged close to the offered 95 percent premium price after the owner of French hospitality brand Club Med and luxury resort Atlantis Sanya announced plans to delist after a year of poor trading performance.

After a two-week suspension, Fosun Tourism [HKG: 1992] resumed trading yesterday. Its share price was 0.6 percent elevated at HKD7.25 (US 93 cents) today. after jumping as much as 83 percent yesterday.

Fosun Tourism will buy back all publicly traded shares not held by parent company Fosun Group for HKD7.8 per share, representing a 95 percent premium to the closing price on Nov. 26, the last trading day before the suspension, the Shanghai-based firm announced yesterday.

Following the buyback, Fosun International and Fosun Holding, two subsidiaries of Fosun Group, will hold approximately 98.4 percent and 1.6 percent of Fosun Tourism's equity, respectively. The shares will be delisted from the Hong Kong Stock Exchange.

Insiders told Yicai that the main reasons for privatization are the company's undervaluation and poor liquidity. To facilitate better future development, the firm decided to delist.

Fosun Tourism emphasized that it would continue normal operations without plans for significant business adjustments. Employment and benefits will remain unchanged.

Years of sluggish post-Covid travel and the real estate downturn have prompted the hotel operator to transition to an asset-light operation model. For instance, the ongoing expansion of the Taicang Alps Resort in Jiangsu province will be entirely funded by the municipal government, with Fosun Tourism responsible only for operations and management. The CNY5 billion (USD688.4 million) expansion will add indoor ski facilities to the resort.

In the first half of this year, Fosun Tourism reported a net profit of CNY322 million (USD44.3 million), a 32 percent decline from the previous year, while revenue grew 6 percent to CNY9.4 billion (USD1.3 billion), according to the latest financial report. As of June 30, Fosun International and Fosun Holding held 78.2 percent and 1.2 percent of the firm's shares, respectively.

Editor: Emmi Laine