Fairbridge Capital buys majority stake in Thomas Cook India

THOMAS Cook Group will sell its 77.1 per cent stake in Thomas Cook India (TCI) to Fairbridge Capital, a subsidiary of Toronto-based Fairfax Financial Holdings, which is owned by India-born billionaire Prem Watsa.

With a bid price of US$150 million, Fairbridge Capital trumped other suitors such as KKR, Tata Capital, Bravia Capital, Japan Travel Bureau, Travelex and The Carlysle Group.

TCI shares are currently trading at Rs 61.20 each (US$1.09), meaning Fairbridge Capital will effectively seal the deal with a 20 per cent discount on TCI’s US$190 million valuation.

The takeover will give Fairbridge Capital the right to use the Thomas Cook brand name for 12 years, with the licensing rights applicable across India, Sri Lanka and Mauritius. Madhavan Menon, currently managing director of TCI, will remain in charge.

Subhash Goyal, president, Indian Association of Tour Operators and chairman, Stic Travels New Delhi, said: “TCI is a strong company and it appears they will not separate their travel and forex business, as had been (suggested) earlier. The sale is a welcome move as it will add fresh impetus to an already solid business.”

Thomas Cook Group put its India subsidiary up for sale in January to extricate itself from a financial meltdown. The company is also in the midst of offloading its 51 per cent stake in Hoteles Y Clubs De Vacaciones to Palma de Mallorca-based Grupo Iberostar for US$96.3 million.

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