Thomas Cook’s share slide continues

Thomas Cook continued its stock market descent yesterday despite announcing an extension of its banking facilities ahead of City trading and confirming plans to raise £200 million through asset sales.

The group’s shares fell a further 4.9% over the day, taking Thomas Cook’s market capitalisation to just over £616 million. Shares were priced at 67p following a 44% decline last week amid growing expectations of a private-equity bid for the group.

Shares in rival Tui Travel also fell on Monday, by close to 5.86%, amid a general decline in the price of shares as markets took fright at the prospects of a default in Greece and failure to set a budget in the US.

The FTSE 250 index of companies, which includes both Thomas Cook and Tui Travel after both fell out of the FTSE 100, fell by 1.86%. Analysis of stock exchange movements shows the market usually rises on a Monday.

Tui Travel’s share price also fell last week by 17%, pulled down by general concern about the state of the travel market following Thomas Cook’s profit warning last week. However, Tui Travel retains a market capitalisation of £2.12 billion.

Little more than a year ago, City analysts were suggesting Thomas Cook stock was undervalued at £1.90 and was worth 50p-60p more. Other major companies in the travel and aviation sector also saw declines.

Shares in easyJet fell 4.84%, outpacing the fall in market. British Airways parent International Airlines Group saw a 1.94% fall on the London Stock Exchange and Carnival a 0.95% decline.

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