Thomas Cook share price soars after Chinese Conglomerate Fosun International takes five per cent stake

 
Jessica Morris
Follow Jessica
Fosun recently bought Club Med for €900m, and has been sniffing around oil explorer Afren (Source: Getty)

Thomas Cook's share price soared today after Chinese billionaire Guo Guangchang took a five per cent stake.

The tour operator, which staged a marked turnaround after nearly collapsing in 2011, surged 16.2 per cent to 140p per share in early morning trade. The company's shares have risen 9.5 per cent so far this year.

Guangchang's conglomerate Fosun International paid £91.8m for 73,135,777 of the company's ordinary shares. Thomas Fosun intends to double its stake to 10 per cent by purchasing more shares on the open market.

The partnership will allow Thomas Cook to work with other travel and leisure businesses owned by the conglomerate, as well as providing access "over the medium term" to the Chinese tourism market.

"Thomas Cook's strong brand heritage and its leading position in the European travel market, together with Fosun's extensive expertise and resources, will capitalise on the increasing demand for international leisure travel," Wang Qunbin, executive director and president of Fosun.

"The investment in Thomas Cook complements our other recent investments in the sector, providing opportunities for further value creation."

Fosun recently snapped up French holiday resorts firm Club Med in a deal worth around €900m (£704m), and has also backed a $500m cash deal for troubled oil explorer Afren.

It is thought that Fosun will look to expand Club Med into emerging economies in an attempt to tap into the increased consumer spending of their growing middle classes.

"Building on our significant progress to-date, we are delighted to announce our partnership with Fosun, which represents a major milestone in Thomas Cook's 174-year history designed to bring significant benefits to Thomas Cook and its shareholders," Frank Meysman, chairman of Thomas Cook, said.

"Fosun's strong track record of value creation and focus on international tourism makes it the ideal partner to strengthen our brands and products."

Related articles