Discussions with Chinese group take off - raising possibility of sale.
Fosun flies in for an offer for Thomas Cook tour operator business
- Fosun is already Thomas Cook’s largest shareholder with an 18% stake.
- Shares responded well on the news with a 12% rise.
- Some analysts have questioned whether the company can survive so investors will be relieved about the possibility of a bid for all or some of the company.
Shareholders in Thomas Cook finally had some good news today as the company confirmed it is in talks with Chinese group Fosun about the possible sale of its tour operator business. The news is not entirely a surprise as there were rumours of a potential bid last month from Fosun, which already has a significant stake in the company. The news comes three weeks after Thomas Cook received a bid from its northern European business from private equity group Triton Partners.
Thomas Cook’s shares responded well with a 12% rise but they’ve had a torrid time of late, dropping 86% over the past year. The company reported a £1.5bn pre-tax loss in May, is struggling with large debts and announced a 12% drop in summer bookings. Some analysts have questioned whether the company can survive so investors will be relieved about the possibility of a bid for all or some of the company. Naturally there is no certainty of a bid emerging at this point, and no assumptions should be made about the size of any bid and what shareholders may receive, but this is a positive development.
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