One of China’s fastest-growing conglomerates has spent almost £92 million buying 5% of the world’s oldest travel company, Thomas Cook.
The move sees Shanghai’s Fosun International – which was set up by four Chinese graduates with $4000 in 1992 and is now worth £7 billion – park itself on even more European sun loungers.
Fosun bought French travel giant Club Med just last month in a deal worth €939 million.
Now the Chinese firm, chaired by entrepreneur Guo Guangchang, who styles himself as “the Warren Buffett of the East”, has paid £91.9 million for 5% of Thomas Cook
It intends to double that stake to 10% by open-market share sales.
Shares in FTSE 250-listed Cook leapt 14% on the deal which its chief executive Peter Fankhauser said was mostly about accessing China’s huge tourism industry, as well as selling Club Med holidays in his High Street stores.
“It’s about tapping into new growth opportunities in the biggest and fastest-growing leisure market in the world,” he said.
“China was even bigger than the US last year in terms of the number of foreign trips.”
Cook’s shares rocketed 17p to 137.6p: just two years ago they were worth only 14p as the 174-year-old pioneer of the package tour faced the prospect of collapse.
Boss Harriet Green was parachuted in before abruptly leaving in November last year, saying her work at Cook was “complete”.
Her replacement Fankhauser said the travel giant had been in talks with Fosun for the past two years, but claimed Green’s departure hadn’t had an impact: “this isn't about personality, it’s about the team.”
Fosun - whose executives toured Cook’s Canary Island hotels before sealing the deal - said it had “no plans to take-over Thomas Cook [entirely], but was making a clear financial commitment to becoming a long-term strategic shareholder.”
The investment will also see China’s biggest privately-owned conglomerate fund the growth of Cook’s “Concept Hotel” brands - 220 pool and beach resorts which the pair intend to expand through new franchises.
Fankhauser warned: “These things take time – don’t expect anything to happen overnight.”
He said Cook would try to lure more Chinese tourists into its hotel rooms but warned UK visa rules might dampen demand to this country, adding: “We’d be delighted to have more Chinese tourists in the UK, but it depends on the travel restrictions.”
