Leading travel company Thomas Cook is learnt to have put a price of Rs 1,716 crore on the 77.1 per stake it holds in the India business. It has pegged the asking price at Rs 105 a share, in a bid to cut the mounting debt of its UK-based parent company.
A Thomas Cook India spokesperson refused to divulge details of the ongoing negotiation. But market sources said London-headquartered foreign exchange company Travelex had emerged as the leading bidder, offering a price between Rs 90 and Rs 95 a share. Dani Filer, head of communications, Travelex, said the company did not want to comment on such a speculation.
Thomas Cook India is selling its consolidated business, including foreign exchange and travel business together. Therefore, even as Travelex’s core business is foreign exchange, it is bidding for the entire 77.1 per cent stake in Thomas Cook at this stage. But industry experts have not ruled out the possibility of Travelex hiving off the travel arm at a later stage, while retaining only the forex business. They say Thomas Cook may not be keen on entering tripartite agreements in the bidding stage, as it may complicate the sale process.
| IN THE RACE List of Thomas Cook India’s bidders |
| PE INVESTORS |
| * Kohlberg Kravis Roberts |
| * The Carlyle Group |
| * Everstone Capital |
| * T A Associates |
| * Actis |
| UK-BASED FOREIGN EXCHANGE CO |
| * Travelex |
| GOLD FINANCING NBFC |
| * Muthoot Finance |
| CHINESE TRAVEL, TOURISM CO |
| * HNA Group |
Tata Capital, which provides end-to-end travel-related services, including forex, is believed to have joined the fray to buy Thomas Cook India. Analysts said Tata Capital’s entry had further intensified the race to buy the 130-year-old travel company. Tata Capital did not reply to a questionnaire sent by Business Standard.
“Contrary to what some of the bidders may want, Thomas Cook does not wish to get into exclusive discussions with any buyer at this stage. This is a normal practice for a company wanting to get the highest price,” said a market analyst who did not wish to be quoted.
According to people in the know, the transaction is being done in a two-way bid process. This means the closest bidder would get a chance to match the highest bid, thereby helping Thomas Cook get a good price. The company is expected to close the deal by June.
Others in line for picking up the stake include PE and global investment firms, including Kohlberg Kravis Roberts, Carlyle, Everstone Capital, T A Associates and Actis. One of the largest gold financing NBFC Muthoot Finance, China-based travel and hospitality group HNA and Bravia Capital of Hong Kong had also placed their expression of interest last week.
More From This Section
The travel company is learnt to have started the second round of talks with the bidders, providing them access to the company’s data room. Thomas Cook has appointed merchant banking firm Credit Suisse to lock the deal. It has also got on board law firm Trilegal as its legal consultant for the sale. Trilegal was an advisor for the Vodafone-Hutch deal, among others.
While the 77.1 per cent stake in its India operation is held by the parent company, the rest 23 per cent is with foreign institutional investors, corporate bodies, banks and mutual fund companies. Of this, Thomas Cook India holds 3.9 per cent.