You heard in Singapore first. The CEO of the Fosun Tourism Group did not deny the company was moving ahead with a larger play for Thomas Cook at Skift Forum Asia. Keep your eyes peeled for what would be one of travel's biggest deals of 2019.
Fosun, the Chinese conglomerate that owns Club Med, is preparing to make an offer for the majority of British travel giant Thomas Cook.
The news, first reported by Sky News, comes less than two weeks after Qian Jiannong, the CEO of the Fosun Tourism Group, hinted at Skift Forum Asia on May 27 that a deal is possibly in the works. When pressed on whether Fosun, which is Thomas Cook’s largest shareholder with an 18 percent stake, would move ahead to buy the company, Qian played coy. “I can’t tell you more,” he told Skift Asia Editor Raini Hamdi onstage.
Sky News reported Saturday that Fosun is prepping a bid for the tour operator business of Thomas Cook, which represents the majority of the company. Fosun has hired the investment bank JP Morgan as its advisor, Sky said.
Thomas Cook on Monday confirmed it was in talks with Fosun. “There can be no certainty that this approach will result in a formal offer,” the company said. “However, the board will consider any potential offer alongside the other strategic options that it has, with the aim of maximising value for all its stakeholders.”
Fosun’s strategy is to seek opportunities to accommodate Chinese travelers in Europe beyond the major cities, which are the destinations for 80 percent of Chinese tourists. Fosun derives 40 percent of its revenues from Europe, 50 percent in Asia, and the remainder in the U.S., he added.
Thomas Cook has endured a torrid 12 months with continuing Brexit uncertainty adding to the problem of last year’s European heatwave impacting bookings. Its lenders are so concerned that they have hired FTI Consulting to assess their financial exposure to Thomas Cook.
UPDATED: This story was updated to include a confirmation of talks from Thomas Cook.
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Photo credit: SENTIDO Carda Beach Atlantica in Greece is one of the destinations where Thomas Cook book tours, a business that Fosun looks to be keen to take over. Thomas Cook Group