The world's oldest travel agent Thomas Cook (TCG) surges 16.8% to 140.9p as speculation mounts that the tour operator is being targeted for takeover by Chinese investment group Hong Kong’s Fosun International (0656:HK), which bought a 5% stake. Billing the deal as a 'strategic partnership', Fosun has also made it clear that it intends to up its stake to 10%. The markets however seem to treating this as a prelude to a full-blown buy-out.
The Thomas Cook stake is not the group's only foray into the western tourism and leisure segment. In 2010, Fosun initially acquired a 7.1% stake in French holiday group Club Med before buying the company out for €393 million in February.
Fosun – founded in 1992 by China's answer to Warren Buffett, Guo Guangchang – has interests as diverse as insurance, tourism, steel and pharmaceuticals.
From an investment perspective, the Fosun deal looks canny. When last we looked at Thomas Cook in detail on 29 January, we highlighted the upsides in the macroeconomic space where the group operates. Falling fuel prices, low inflation and looser monetary policy in the eurozone are all liekly to be positives which offset the shock departure earlier this year of the group CEO Harriet Green.