China’s Fosun International Ltd (復星國際) has bought a 5 percent stake in Thomas Cook Group PLC, deepening its foray into Europe’s tourism sector and potentially helping the British company to compete with travel leviathan TUI Group.
Fosun paid ￡91.9 million (US$140.1 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 yesterday.
News of the investment sent shares in Thomas Cook soaring 15 percent to ￡1.39, their highest level for about six months.
Thomas Cook said in a statement that it expects the deal to boost its earnings in the fiscal year to Sept. 30 next year, assuming plans under the partnership are implemented this year.
One of the plans is to explore collaboration opportunities with Club Mediterranee SA, the French holiday company it bought last month, where Fosun is looking to turn around a business struggling in Europe and move more aggressively into fast-growing markets such as China.
“The investment in Thomas Cook complements other recent investments of the group in the sector, providing opportunities for further value creation,” Fosun chairman Guo Guangchang (郭廣昌) said in the filing, adding that there is increasing demand for international leisure travel.
Fosun tourism and commercial group president Qian Jiannong (錢建農) told reporters that the group does not plan to use the investment as a first step toward acquiring Thomas Cook in its entirety.
Meanwhile, Thomas Cook said the deal would help to accelerate its plans to develop more specialized hotels and would aid expansion in China over the medium term, as the pair develop hotel brands tailored to the Chinese market.
That could improve Thomas Cook’s ability to compete against the world’s biggest tourism and leisure company TUI Group, which was formed in December last year after the merger of London-listed TUI Travel and German majority owner TUI AG.
Global mergers and acquisitions in the tourism industry more than doubled in value last year as low borrowing costs and growing competition fueled the busiest year in seven.
Fosun’s purchase of the Thomas Cook stake, in the form of a new share issuance at ￡1.2559 a share, is being undertaken by Fosun’s Portuguese insurance subsidiary Fidelidade-Companhia de Seguros.
The price represents a 4.1 percent premium on Thomas Cook’s closing price on Thursday.
Thomas Cook is in the middle of a cost-saving plan, but aims to grow this year, despite tough trading conditions in mainland Europe. It made a loss of about US$80 million in the three months to Dec. 31 last year.
Fosun’s bid for Club Med, which valued the company at about US$1.15 billion, was finalized early last month after Italian businessman Andrea Bonomi’s Global Resorts SAS declined to raise its offer.
POOR INTERNAL CONTROLS: Insurance Bureau Director-General Shih Chiung-hwa said the company is expected to get back on track while its chairman is suspended The Financial Supervisory Commission (FSC) yesterday fined Shin Kong Life Insurance Co (新光人壽) NT$27.6 million (US$939,415) for a reckless investment that endangered its solvency, and suspended its chairman Eugene Wu (吳東進) for poor supervision. The penalty is the second-highest in a single case after Nan Shan Life Insurance Co (南山人壽) was fined NT$30 million in September last year and its chairman Du Ying-tzyong (杜英宗) suspended for two years, the commission said. In three rounds of special and regular examinations conducted since last year, the commission found that Shin Kong Life had given too much power to an asset and liability management committee
Sony Corp has cut its estimated Play Station 5 (PS5) production for this fiscal year by 4 million units, down to about 11 million, following production issues with its custom-designed system-on-chip (SOC) for the new console, people familiar with the matter said. The Tokyo-based electronics giant in July boosted orders with suppliers in anticipation of heightened demand for gaming in the holiday season and beyond, as people spend more time at home due to the COVID-19 pandemic. However, the company has come up against manufacturing issues, such as production yields as low as 50 percent for its SOC, which have cut into
HEAVY INVESTMENT: Moody’s affirmed the firm’s ‘Aa3’ rating with a ‘stable’ outlook due to its leading position in the industry and ability to match customer requirements Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) revenue this year is expected to increase about 21 percent to NT$1.29 trillion (US$44.01 billion) from NT$1.07 trillion last year, driven by strong demand for advanced 5-nanometer and 7-nanometer chips mainly used in smartphones and high-performance computing devices, a Moody’s Investors Service report on Wednesday said. TSMC’s rate of revenue growth next year is to increase to 7.5 percent, the ratings agency said. The company, which supplies 5-nanometer chips for Apple Inc’s new iPad series, has introduced the advanced chips ahead of its competitors and gained a significant share of the market for the foundry industry’s
O2O BICYCLE SHOW: The Taiwan Bicycle Show next year is to be online to offline, with forums, audio-visual conferences and livestreaming of the offline events Local bicycle makers expect demand to continue outpacing supply due to orders triggered by the COVID-19 pandemic, with some companies seeing orders back up through next year. “Next year is all full in terms of orders. Our lead time on components is one year,” Giant Manufacturing Co Ltd (巨大機械) chairwoman Bonnie Tu (杜綉珍) told a news conference in Taipei organized by the Taiwan External Trade Development Council (TAITRA) to announce next year’s Taipei Cycle Show. The pandemic has reduced bicycle supplies and increased demand around the world, Robert Wu (吳盈進), chairman of KMC (Kuei Meng) International Inc (桂盟國際), one of the world’s