A majority stake in Thomas Cook, the FTSE 100 travel group, is expected to come up for grabs following the collapse of Arcandor, the German retail giant which has a 52.8 per cent holding.
Arcandor today applied for bankruptcy after Angela Merkel, the German Chancellor, refused to provide state aid to rescue the group.
The group was denied a €437 million (£377 million) loan by the German Government yesterday, with Chancellor Merkel accusing its shareholders and backers of not presenting a sustainable plan that would protect taxpayers’ money.
The court bankruptcy filing covers the Karstadt department stores, Primondo Gmb mail-order and the Quelle catalogue businesses but excludes Thomas Cook, which remains ring-fenced.
The group’s creditor banks, led by Royal Bank of Scotland, are expected to put the Thomas Cook stake up for sale, with analysts suggesting that the most likely scenario is an orderly placing of the shares with institutional investors attracted by the group’s robust business model.
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But with a majority stake up for grabs, a bid remains a possibility, with Rewe, Germany’s third-biggest tour operator, tipped as a possible suitor. Rewe said that it would consider buying the stake if it was put up for sale.
In a magazine interview at the end of last month, Karl-Gerhard Eick, the Arcandor chief executive, admitted that he had approached Rewe a few weeks ago to see if it would be interested in the holding, but nothing had come of it.
Analysts expressed scepticism over the chances of a £2 billion-plus bid in the current financial climate.
Manny Fontenla-Novoa, the Thomas Cook chief executive, refused to comment on Rewe’s interest, but cautioned that it was “very early days” and it could be “weeks or months” before there was clarity on the future of the stake.
He added that if the banks or administrators opted to sell the stake, they were “more likely to get maximum value with the support of management”.
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There have been suggestions that Mr Fontenla-Novoa could seek backing for a management buyout, although he laughed at the idea, declaring: “No!”
The travel group issued a statement this afternoon confirming that the collapse of Arcandor “has no impact on Thomas Cook’s financial position or its operational performance”.
It said: “We remain as a completely independent and separate business, ring-fenced from Arcandor. There is no impact whatsoever on our aircraft or our hotel relationships, nor on the holidays that we provide to our customers. It remains very much business as usual at Thomas Cook.”
It also confirmed that it had received no bid approaches and was not in talks with any potential buyers either for the company or the Arcandor stake.
Arcandor, which employs 50,000 people in Germany, had been targeted by Metro, the German retailer which owns Media Markt, the seller of electricals goods, and Makro, cash-and-carry chain. Metro opposed a government bailout in favour of forcing Arcandor into a merger.
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The German Government had earlier turned down a request for €650 million in credit guarantees. A bailout would have been hindered by European Union state aid rules.
Metro has previously said that it could merge Arcandor’s department stores with its own, even if Arcandor became insolvent.