On March 6, Thomas Cook Group announced that Fosun International, a Chinese investment group, bought a 5% stake in the company by investing £91.8 million for the issue of 73,135,777 new Thomas Cook ordinary shares.
Fosun also intends to purchase further Thomas Cook shares over time on the open market with a view to increasing its shareholding in Thomas Cook up to approximately 10% of the enlarged issued ordinary share capital
The Thomas Cook Board described the partnership with Fosun as “an attractive opportunity to deliver significant benefits to Thomas Cook’s customers, staff and shareholders”.
The UK holiday group maintains that the new investment partner will help it to accelerate its product strategy, including the further development of its exclusive Concept hotels across its key destination markets, as well as aid collaboration opportunities with Fosun’s other travel and leisure businesses, namely Club Med, and provide access to the fast-growing Chinese tourism market.
Assuming the plans under the partnership are implemented in 2015, the Board of Thomas Cook expects the proposed initiatives to deliver sufficient profit to be earnings accretive in the financial year ended 30 September 2016.
Peter Fankhauser, Chief Executive Officer of Thomas Cook, said: “Our partnership with Fosun is aimed at accelerating our profitable growth strategy by allowing us to further develop our differentiated product in our core destination markets, to collaborate with Fosun’s other portfolio businesses particularly in France, and to access the world’s largest and fastest-growing tourism markets with an experienced local partner. We are looking forward to working closely with Fosun’s team to execute the commercial opportunities we are developing.”
The proceeds from the cash placing will be used to support Thomas Cook’s growth strategy and to further improve its financial position.
Fosun’s acquisition of shares in Thomas Cook has been made through its subsidiary Fidelidade-Companhia de Seguros, the largest insurance company in Portugal.
Although president of Fosun's tourism and commercial group, Qian Jiannong, stated that the group does not plan to use the investment as a first step towards acquiring Thomas Cook in its entirety, market observers suggest this could be the ultimate aim since the Chinese company has past form of such tactics. In February it finalised the acquisition of Club Med in a $1.15 billion deal, having first bought a 7% stake in 2010.