Fosun International Ltd.’s tourism unit is in talks to buy Thomas Cook Group Plc’s tour-operating business, Sky News reported.
Hong Kong-listed Fosun is already Thomas Cook’s biggest shareholder and is working with JPMorgan Chase & Co. on the potential offer. Discussions are at an early stage and it isn’t certain a bid will emerge, Sky said, citing people it didn’t identify. Any deal would exclude Thomas Cook’s airline business, which Fosun would be unable to acquire due to European Union rules.
Officials at both companies declined to comment when contacted by Bloomberg. The Fosun Tourism Group is a division of billionaire Guo Guangchang’s drugs-to-insurance conglomerate, which owns the luxury resort brand Club Med.
Thomas Cook, the world’s oldest travel agency, has been grappling with a tough operating environment in the European travel sector amid dwindling bookings and uncertainty related to the U.K’s departure from the EU. Selling at least part of the operation is crucial to the company’s survival because a new 300 million-pound ($382 million) loan announced last month is conditional on making progress with a disposal.
Other companies may also be weighing bids for parts of Thomas Cook. The tour operator last month received an offer for its Scandinavian arm from private equity company Triton Partners. It said it was evaluating the offer, though no decision had been made. There has also been an approach for its airline unit from Portuguese airline Hi Fly, the Mail on Sunday reported earlier this week.
Fosun Tourism Chairman and CEO Jim Jiannong Qian said in a May 28 interview with Bloomberg that acquisitions as well as organic growth would be part of the company’s business model. Fosun is well placed to take advantage of the European and Asian markets, he said.
“We do believe we have synergies with this company because the European market is still the largest in the leisure holiday business,” he said of Thomas Cook last month. “If you combine the market of these two continents together, it will make a very, very interesting business.”
A bid for the Thomas Cook business could come “within weeks,” Sky reported.