The report of takeover interest from private equity firms helped to quell worries about the world's oldest tour operator's £1.7 billion of debt that have wiped two thirds off its market value over the past six months.
Citing unnamed sources, Sky News reported over the weekend that U.S. private equity firm KKR & Co and Swedish buyout group EQT Partners were potential bidders for the group. China's Fosun International, which owns a 17 percent stake in the company, was understood to be among those to have lodged preliminary interest in the tour business, it added.
Thomas Cook has brought in advisers from AlixPartners to work on its balance sheet and cost-reduction plans, while its syndicate of more than a dozen lenders has hired FTI Consulting to advise on their financial exposure to the company, the report added.
A spokesman for the company declined to comment on the report.
The company's shares listed on London's small-cap index were 16.2 percent in late morning trade and the price of the company's 2022 euro-denominated bonds rose more than 6 percent, according to Tradeweb.
Both were set for their best daily performance since early December.
The cost of insuring debt issued by the company against default eased to 24 basis points to its lowest in weeks from 28 previously, IHS Markit data showed.
The report comes after Thomas Cook put its airline business up for sale and closed stores in February, after a heatwave in northern Europe last summer deterred holidaymakers from booking last-minute deals, leading to two profit warnings and speculation among investors that it might need to raise funds.
Thomas Cook last month announced a review of its money division in its latest step to streamline operations and focus on its core holiday business.
(Reporting by Samantha Machado in Bengaluru and Josephine Mason in London; additional reporting by Georgina Prodhan in London; Editing by Bernard Orr/Keith Weir)