Chinese international conglomerate and investment company, Fosun International Limited, is reportedly considering a takeover of ailing UK-based travel firm, Thomas Cook.
A joint venture between the two companies is already in operation and Fosun is now reported to have lodged a preliminary interest in buying Thomas Cook’s tour operating business, the UK’s oldest provider. Fosun already has a varied range of businesses in its portfolio, including a sporting interest with its ownership of Wolverhampton Wanderers FC, an arts interest with its 24.5 percent share in Canada’s Cirque du Soleil theatre group, and an existing travel interest with its ownership of Club Med, a France-based luxury holiday company.
Fosun’s reported interest in the takeover, along with a number of other potential suitors, has seen a surge in Thomas Cook’s share value, which had been depressed of late as the company had struggled with its debts, compounded by a reduction in demand for package holidays and the effect of stiff online competition. Profit warnings posted in September and November 2018 had added to a fall of around 80 percent in the company’s share value over the past 12 months. It has recently announced plans to close 21 of its high street stores for a total of 320 job losses.
Meanwhile, Thomas Cook’s airline business was made the subject of a strategic review in February this year in an effort to create funds to invest in other aspects of its business portfolio. Thomas Cook is not the only travel company suffering financially at the moment, an industry-wide price war and a reluctance by customers to commit to major purchases due to economic uncertainty are issues that are also affecting most other large operators.