Thomas Cook’s biggest shareholder, Fosun Tourism Group, is in talks to take over the struggling firm’s tour operating business.
The Chinese owner of Club Med owns 18 per cent of Thomas Cook already, and is now in talks to make a bid for the majority of its business, according to Sky News.
Talks are in a formative stage with no bid from Fosun guaranteed, the report claims, but if successful it could see the 178-year-old British travel company broken up.
It would also represent one of the most significant purchases of a British firm by a Chinese rival.
Fosun would take control of the operating business, which produces around £7.4bn in revenue a year, serving more than 11m customers.
The Chinese firm could not take control of the airline business, however, due to EU aviation restrictions on ownership.
Thomas Cook has already started the process of auctioning off its airline operations, which analysts believe could be worth around £1bn.
Fosun, which is listed on the Hong Kong stock exchange, has owned a stake in Thomas Cook since April 2015.
Thomas Cook’s shares have been extremely volatile in the past month, and are down by 85 per cent over the last year amid its financial struggles.
It recently suffered a half-year loss of £1.5bn, which came about largely due to a £1.1bn goodwill writedown relating to its merger with MyTravel in 2007.
Despite its struggles, Fosun has consistently backed the travel operator. The Chinese firm has helped prevent shares falling even more than they already have by increasing its stake in recent months. Fosun and Thomas Cook also have a joint venture in China which enjoyed an eightfold increase in customers last year.
It’s problems have also been exacerbated by requests from payment firms to hold onto millions of pounds of customers’ money, while analysts at Citi said it now had zero equity.
Thomas Cook has so far declined to comment. Fosun did not immediately respond to request for comment.