Thomas Cook shoots more than 18% in stock market before rumors on a possible OPA

Thomas Cook’s shares have soared more than 18% on the London Stock Exchange on Tuesday, after the information spread by Sky Mews about a possible interest of private equity funds KKR and EQT and the Chinese group Fosun International for the British tour operator, who studies the partial or total sale of the business.

The Chinese conglomerate Fosun partner of the British tour operator since 2015, has a 17% participation in the tourism group. In addition, together they launched Thomas Cook China, a joint venture to boost the tourism business in the Chinese market under the British brands.

Some analysts see in this show of interest the possibility that the Asian group aspires to launch a public offer of acquisition of shares (OPA) on the British tourist group, which expressed its intention to focus on its hotels in front of the air division, with the consequent requirement that in order to operate in the European Union, with an operator’s certificate, the control of the property must be in the hands of European investors.

Although the British tour operator has avoided commenting on this information, the fact is that in February Thomas Cook announced a strategic change in his business that involves the «strategic review» of the group’s air division, Thomas Group Airlines, in the that all options will be considered, among which a sale is not ruled out, in order to obtain liquidity, after closing 2018 in ‘red numbers’.

In March, it announced the closing of 21 of its stores in the United Kingdom as part of the program of efficiency and rationalization of its network of points of sale to adapt to the changing behavior of travelers who increasingly make more reservations via the Internet. This reduced its network in the United Kingdom to a total of 566 stores.

In 2018, Thomas Cook recorded losses of 163 million pounds sterling in its last fiscal year (188 million euros) compared to gains of nine million euros (10.4 million euros).

In the first quarter of this year it recorded operating losses of 60 million pounds sterling (69.4 million euros), an increase of 30.4% over the same period of the 2018 fiscal year.

The tour operator attributed these figures to its lower performance in the United Kingdom and northern Europe, which was also helped by strong competition and market conditions with the bottom ‘Brexit’, the end of the summer season and lower demand of winter holidays in the Nordic countries.

Looking ahead to 2019, the group has made it a priority to return to profitability. To do so, it will focus on better management of its capacity, address the performance of its tour operators in the United Kingdom, promote innovative sales of auxiliary services and seek to improve the margins of its own-brand hotel strategy and implement greater focus and cost discipline throughout the group.