The parentage of Thomas Cook (India) could soon change hands. A court in Germany has put on the block the 52.8 per cent stake held by bankrupt retailer Arcandor in Thomas Cook Group Plc which owns 77.31 per cent in India’s second-largest travel agency after Kuoni. Thus, there is likely to be a new owner of Thomas Cook Group Plc which will continue to own a majority stake in the Indian subsidiary.
Arcandor had filed for bankruptcy protection early this week in a court in Essen, Germany after it failed to secure a government bailout. Thomas Cook (India) officials declined to comment. Thomas Cook Group Plc had acquired Thomas Cook (India) in March 2008 from Dubai Investment Group.
| Inside Thomas Cook (India) | |
| Turnover (2008-09) | Rs 310 crore |
| Profit (2008-09) | Rs 37 crore |
| Market cap (9 June) | Rs 1,260 crore |
| Offices | 161 |
| Employees | Over 2,500 |
Informed sources said that another German retailer, Rewe Group, is interested to buy the Thomas Cook Group Plc shares held by Arcandor. The sources also added that the administrator may split Arcandor’s businesses so as to realise maximum value from the asset sale.
Some experts said that this could trigger the Takeover Code of the Indian stock market regulator, the Securities & Exchange Board of India, which requires an open offer in case an investor acquires more than 15 per cent in a company. “If somebody acquires the 52.8 per cent equity stake held by Thomas Cook Group Plc for cash, it will trigger an open offer for Thomas Cook (India),” said Ambit Finance Director (capital market) Gautam Gupte. However, in case the transaction takes place under a scheme of arrangement, like a merger of Arcandor with some other company, than it may get an exemption from the open offer, he added.
Others felt the acquisition of Thomas Cook Group Plc may not result in an open offer for the Indian company. “In a case like this where the change in the management will take place under the supervision of the government and not by choice, Sebi normally exempts the buyer from an open offer,” said a leading investment banker who did not wish to be named. “Although the change in the management, even at the holding company level, triggers the takeover code, there have been instances of the market regulator exempting acquirers from the mandatory open offer as the change in management took place under a scheme of arrangement,” another investment banker added.
Whenever there is the likelihood of an open offer, the share price of the target company usually goes up. In this case, after the disclosures made by Arcandor, the share price of Thomas Cook (India) has fallen nearly 10 per cent to Rs 59.5 from Rs 65 on June 9.
Thomas Cook (India) offers a broad spectrum of services that include foreign exchange, corporate and leisure travel, and insurance. The company, which set up shop in the country in 1881, operates in over 61 cities. The company has branch operations in Sri Lanka and a subsidiary in Mauritius. In June 2006, it had acquired LKP Forex and Travel Corporation (India).