CHINA'S Fosun International has bought a 5 percent stake in Thomas Cook Group, deepening its foray into Europe's tourism sector and potentially helping the British company to compete with travel leviathan TUI Group.
News of the investment, which the companies said came after two years of talks, sent Thomas Cook shares soaring by as much as 24 percent to 150.2 pence, their highest level for more than nine months.
Fosun paid 92 million pounds ($140 million) for the Thomas Cook stake and will seek to double its holding in the world's oldest travel group to 10 percent, it said in a filing to the Hong Kong stock exchange on Friday.
Thomas Cook said that it expects the tie-up to enhance earnings in the financial year to Sept. 30, 2016, assuming plans under the partnership are implemented in 2015.
The jump in the company's share price turns around a 13 percent decline after the surprise departure of former CEO Harriet Green in November and a further drop after it warned in February of a tough trading environment in Europe.
The president of Fosun's tourism and commercial group, Qian Jiannong, told reporters that the group does not plan to use the investment as a first step towards acquiring Thomas Cook in its entirety, but the Chinese company has some form with such manoeuvres.
In February it finalised the acquisition of France's Club Med in a $1.15 billion deal, having first bought a 7 percent stake in 2010.
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