Thomas Cook share price: what’s the outlook after surprise Hi Fly bid?

After issuing its third profit warning in less than a year, Thomas Cook reportedly received a bid from Portugal-based private airline Hi Fly.

Thomas Cook Source: Bloomberg

Earlier this week, Thomas Cook Group received a surprise bid for its airline unit from Portuguese private carrier Hi Fly, according to a report by the Mail on Sunday.

The offer came at a time when the tour operator desperately needs cash to finance operations after the company was forced to issue its third profit warning in less than 12 months.

Thomas Cook’s airline business garners significant buyer interest

Thomas Cook put its airline business up for sale in February, with the unit receiving a lot of interest from strategic and private equity buyers.

Rival airline carriers including Lufthansa and Virgin Atlantic have reportedly made offers for a portion or the entirety of Thomas Cook’s airline business.

Private equity firms like Indigo Partners, which owns American Frontier Airlines and low-cost carriers including Chile-based JetSmart, Mexico-based Volaris and Europe-based Wizz Air, has also shown an interest in acquiring the unit.

Meanwhile, fellow private equity group Triton Partners has made an offer for the tour operator’s Nordic operations.

Thomas Cook share price slides as pressure mounts

Over the last 12 months, Thomas Cook’s stock has lost more than 87% of its value, with the company’s share price trading at 15p a share, compared to 114p a share this time last year.

Thomas Cook issued another profit warning to investors last month, helping to send its share price to its lowest point in nearly eight years.

After the profit warning, the struggling tour operator managed to secure a £300 million credit facility, giving it greater financial flexibility and investors hope the company can turn things around before it unveils its performance in its upcoming Q3 trading update on July 18.


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