(Bloomberg) -- Thomas Cook Group Plc shares have gained about 60% in two days following a Turkish peer’s investment in the indebted U.K. tour operator.
The stock, which is expected to be heavily diluted by a rescue plan from China’s Fosun Group, reached a three-week high Thursday as investors continued to digest news that tourism entrepreneur Neset Kockar has taken a 6.7% stake.
The price jump suggests shareholders think the existing stock has some , but the Fosun deal could essentially wipe that out, according to Shore Capital analyst Greg Johnson, who spoke by phone.
Until the current rally, shares of London-based Thomas Cook were falling even after Fosun’s mid-July announcement that it was in talks to take part in a 750 million-pound ($909 million) financing project. The transaction would give the Chinese investor control through a debt-for-equity swap and creation of new shares.
It remains to be seen whether the purchase by Kockar, the founder of Anex Tour, is just a “straight punt” or shows he wants to take part in the turnaround attempt, Johnson said.
Even after this week’s gain, there’s “not a lot of there,” considering that Thomas Cook was trading at close to 1 pound a share a year ago and is now down at 7 pence, the analyst said.
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