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 .
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".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
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.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
-
Why Thomas Cook collapsedFeatures Thomas Cook has gone bust, leaving stakeholders, politicians and managers all blaming each other.
-
What investors can learn from Thomas Cook's collapseFeatures 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 demise.
-
Thomas Cook’s holiday nightmareFeatures High debt, fierce competition and one-off factors have pushed tour operator Thomas Cook to the brink of bankruptcy.
-
Share tips of the weekFeatures MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
-
Thomas Cook loses its 'moral compass'
News Tour operator Thomas Cook triggered outrage with its response to the deaths of two children on one of its holidays in 2006.
-
Tips update: Thomas CookFeatures Harriet Green's departure from Thomas Cook has rattled investors in the travel operator. But should it have, asks Phil Oakley.
-
Shares in focus: Should you take a trip with Thomas Cook?Features Package-holiday provider Thomas Cook has done a good job of turning itself around. So, is it time to get back on board? Phil Oakley investigates.
