Fosun takeover may prove best option for Thomas Cook. Ian Taylor reports
Thomas Cook confirmed it’s in talks to sell its tour operator business to Chinese group Fosun on Monday, bringing forward the potential break-up of the company
Fosun Tourism Group, part of Chinese conglomerate Fosun International, already owns 18.7% of Thomas Cook having taken a 5% stake in 2015. Thomas Cook and Fosun also operate a joint venture in China, of which Fosun owns 51%.
Thomas Cook remains in separate talks to sell its airline business, a sale which could help a deal with Fosun since EU ownership rules mean the Chinese group can’t control Cook’s airline.
Thomas Cook confirmed it had received “multiple bids” for its airline last month after announcing the carrier was up for sale in February.
In a statement, Thomas Cook said: “There can be no certainty this approach [from Fosun] will result in a formal offer. However, the board will consider any potential offer alongside the other strategic options it has, with the aim of maximising value for all stakeholders.”
Thomas Cook added that Fosun “know the business very well so they have the ability to move quite fast”.
It is understood Fosun would retain the Thomas Cook name. The Chinese company already owns Club Med which it bought for €939 million in 2015 after a two-year acquisition battle.
Lufthansa confirmed it has bid for Thomas Cook’s German airline Condor and would consider a takeover of the entire airline group. Virgin Atlantic is reported to be interested in Thomas Cook’s UK airline. Private equity firm Indigo, which has multiple airline investments including in Wizz Air, is also reported to have bid, as has Lisbon-based charter carrier Hi Fly.
Thomas Cook has also confirmed an “unsolicited” offer from private equity firm Triton Partners for its airline and tour operator businesses in Norway, Sweden, Finland and Denmark.
Triton bought Netherlands-based online travel group Sunweb in December and added Netherlands and Belgian tour operator Corenden Holiday Group last week. The combined business, bought for an undisclosed amount, has a turnover of €1.1 billion and 1.75 million passengers.
Thomas Cook is expected to report on the progress of its airline sale at the end of this month.
It announced in May that it has secured a £300-million credit facility to carry it through next winter, but this is “principally dependent on progress” in selling its airline.
Thomas Cook’s future was called into question last month when it reported a dramatic rise in winter losses to £1.45 billion owing to a “goodwill impairment” of £1.1 billion on the MyTravel business it took over in 2007.
Questions remain as to whether Thomas Cook can secure a sufficiently high price for its airline, separate its tour operator and airline businesses, and secure arrangements on future flying for its tour operator passengers.