Will Fosun rescue Thomas Cook?

China’s Fosun International is considering bidding for beleaguered British travel company Thomas Cook’s tour operating division.


Some "good news" has arrived at last for Thomas Cook's shareholders, says the Financial Times. China's Fosun International Ltd is considering bidding for the beleaguered British travel company's tour operating division. Fosun's bid comes shortly after Thomas Cook outlined plans to sell its airline in order to gain access to a new £300m financing facility. Whatever happens with Fosun, the airline sale is likely to go ahead since, under EU rules, the Chinese group wouldn't be allowed to own a majority stake in it anyway.

If you own shares in Thomas Cook, you shouldn't get carried away, since a sale to Fosun "is unlikely to leave investors much wealthier", says Lex in the FT. Even after this week's uptick, the stock is still 90% below last year's peak. While it is "a vintage brand plenty of Chinese tourists would appreciate", high indebtedness "weakens Thomas Cook's hand" in talks with Fosun, which has already spent £200m on an 18% stake .

Subscribe to MoneyWeek

Become a smarter, better informed investor with MoneyWeek.

Thomas Cook's shareholders should be grateful if they get anything, since the alternative is "complete wipeout", says Christopher Williams in The Daily Telegraph. Remember, "it won't be the shareholders calling the shots in this situation" as it's "the banks and hedge funds that hold the company's distressed bonds" who have the final say on the deal. They will judge it on Fosun's "plans for the future".

If they are not convinced that Fosun's plans "come with cash to pay down debt", they could choose to take control of the company themselves. That would also mean that Fosun's £200m investment would be reduced to ashes.



Stock markets

The British equity market is shrinking

British startups are abandoning public stockmarkets and turning to deep-pocketed Silicon Valley venture capitalists for their investment needs.
8 Nov 2019

Why Thomas Cook collapsed

Thomas Cook has gone bust, leaving stakeholders, politicians and managers all blaming each other.
26 Sep 2019
Personal finance

What to do if Thomas Cook has left you stranded

The Thomas Cook collapse has sparked the largest repatriation of British citizens since World War II. Here’s what you need to know.
26 Sep 2019
Stock markets

What investors can learn from Thomas Cook's collapse

Bad decisions and bad debt have led to the collapse of 178-year-old travel company Thomas Cook. John Stepek looks at what investors can learn from its…
24 Sep 2019

Most Popular


Want to make money in 2020? Gold and silver are looking like a good bet

If you want to make money from investing, says Dominic Frisby, it’s simple: find a bull market and go long. And in 2020 gold and silver are in a bull …
22 Jan 2020

Money Minute Friday 24 January: the key to UK interest-rate cuts

Today's Money Minute looks ahead to the release of data that could hold the key to UK interest rates cuts. 
24 Jan 2020

Money Minute Thursday 23 January: European interest rates

In today's Money Minute we look ahead to Christine Lagarde's second interest-rate-setting meeting at the European Central Bank.
23 Jan 2020

How the boom in passive investing could create better-run companies

ESG investing, or "ethical investing" as it used to be called, is mostly about the marketing, says John Stepek. But it's not all bad.
24 Jan 2020