Fis May Not Fall For Thomas Cook Offer

Banks and financial institutions (FIs) are unlikely to participate in the open offer being made by C&N Touristic of Germany for picking up an additional 20 per cent stake in Thomas Cook India.

Top FI sources said the offer price of Rs 351.68 offered by C&N Touristic is not attractive enough.

The State Bank of India and Unit Trust of India hold around 15 per cent and 5 per cent equity stake, respectively, in Thomas Cook. C&N Touristic holds 40 per cent while around 40 per cent is held by the public.

However, sources maintained that SBI and UTI have not yet taken a final decision on this. "Our decision will be in consultation with other parties involved in the open offer," a top UTI official said here on Monday.

A couple of weeks ago, the German travel major announced plans to hike its stake in Thomas Cook India from the present 40 per cent at Rs 351.68 a share. The decision to acquire the additional stake in Thomas Cook India follows C&N Touristic's global takeover of Thomas Cook Holdings of the UK.

If the company's offer gets a good response, the total outgo will be around Rs 102 crore.

The offer price, which was at a 11 per cent premium, was far lower than market expectations, said analysts.

Since the announcement of the offer, the Thomas Cook scrip has taken a beating. On the Bombay Stock Exchange, the share closed at Rs 283.50 on Monday, against Friday's close of Rs 284.55.

The open offer will commence on October 16 and close on November 14. JM Morgan Stanley has been appointed as the lead manager to the offer. The offer envisages of 2,916,667 fully paid-up equity shares of Thomas Cook India.

Recently, Thomas Cook India had decided to acquire the operations of Thomas Cook Overseas, the Sri Lankan arm of its parent firm, for a consideration of Rs 2.74 crore. The deal has given the Indian company a foothold in the foreign exchange, leisure travel and corporate travel management businesses in Sri Lanka.

Thomas Cook, which has been operating in India for the last 117 years, has a network of 47 branches in 15 cities. It has started e-commerce transactions from its official website in India.