Thomas Cook has confirmed that it is in discussions with Fosun about a potential takeover deal.

The news follows receipt of a preliminary approach from the Chinese conglomerate for the struggling, UK-based holiday giant.

Fosun is already the largest shareholder in Thomas Cooke, while the Chinese company also owns the Club Med holiday business.

However, Thomas Cook said there could be “no certainty that this approach will result in a formal offer”.

Markets responded well to the move, but shares in the holiday company remain well down on a year ago.

Thomas Cook was trading at 18 pence per share this morning, up 13 per cent, but still well down on the 132 pence per share seen just over a year ago.

In a statement Thomas Cook said: “The board will consider any potential offer alongside the other strategic options that it has, with the aim of maximising value for all its stakeholders.”

Thomas Cook Group is one of the world’s largest leisure travel groups, with sales of £9.6 billion in the year ended September 30th.

It is supported by 21,000 employees and has 200 own-brand hotels.

It operates from 16 source markets and serves over 22 million customers annually.