Potential buyers, including Fosun, a Chinese conglomerate, are circling Britain’s oldest package holiday operator. The company could be split up in a move that could lead to its high street stores and package deals being taken over by one of its main shareholders.

Thomas Cook has been struggling with a dip in demand for package holidays and cut-throat online competition. Potential bidders are now gearing up for either a partial or full takeover of the struggling company which has already announced that it is closing 21 high street stores and many more to come.

Expressions of interest in its Tours business began when it was first reported on Sky News that it was seeking to offload its airline business. But it has since announced a string of profit warnings, including an 80% drop in its share value. Fosun, a Chinese company which is also the largest Thomas Cook shareholder, is among a number of investors that have expressed interest in its business.

Thomas Cook has said that it is seeking to focus more into increasing investments in directly-owned hotels which are now more profitable. It will also evaluate all the options and consider all the bids. A source close to the company said that it is unsurprising that even rivals are making speculative approaches for other parts of the company’s business.

Fosun has a 17% stake in Thomas Cook and already runs a joint venture with the 178-year old firm back in China. Mr. Guo Guangchang, Fosun’s chairman, rose from rural poverty and is now one of China’s richest men.

While a bid from such a private investor with deep pockets could prove quite attractive for Thomas Cook after a troubled year, EU rules banning majority foreign ownership could get in the way of a lucrative deal. The rules could prevent Fosun from running the airline arm of the tour operator.

In May 2018, Thomas Cook’s shares traded above £1.40. But they have since dropped to 25.4p before the bank holiday which left its market value at £376m as compared to a net debt of £1.6bn. The tour operator is trying to tackle its huge debt pile and has taken up restricting specialists, Alix Partners, to work on its balance sheet and its cost reduction plans. The company was recently compelled to call for a meeting of its shareholders to support an extension of its debt limits which had been “inadvertently broken.”

However, analysts have already warned that the tour operator may have to ask its investors for more cash even though it has surpassed the period in which cash reserves are at their lowest for many of the highly seasonal tour operators.

And things are not looking too good for the entire holiday sector which is in the midst of a fierce price war. Thomas Cook’s biggest rival in Europe, Tui, has already issued profit warnings. Budget airline Easyjet has also issued a significantly downbeat outlook.

The online marketplace is also proving to be brutal for Thomas Cook. More holidaymakers are now opting for the internet rather than visiting high street branches. While 64% of Thomas Cook’s sales are through its website, this rising preference has mostly benefited online travel agencies.

The company announced the closure of 21 stores last month, including the loss of 321 jobs. As the company adjusts itself to the online spending revolution, analysts believe there will be many more closures across its 566-store network.

Thomas Cook is named after its founder who was a cabinet maker and who operated day trips from Leicester to Loughborough. The company has recently issued two profit warnings in two months towards the end of last year. In its most recent profit warning, the company blamed the “disappointing year” on the prolonged heatwave in the summer across Europe for killing consumers’ appetite for travel.

Some budget airlines have gone belly up in recent months. These include the British regional carrier Flybmi which collapsed in February, Iceland’s Wow Air which folded last month, and Indian Jet Airways which grounded all its flights this past week.

However, spinning off its airline arm could be an attractive source of cash for Thomas Cook. This is not the first time the tour operator has faced concerns about its survival. Similar doubts were raised back in 2012 when it was forced to dispose of hotels and part of its airline business. The company even carried out a rights issue in 2013 in what seemed like a desperate attempt to shore up its balances sheet.