Thomas Cook Open Offer Gets Fipb Nod

The Foreign Investment Promotion Board (FIPB) has given the nod to German travel and tour major Thomas Cook AG (TCAG) to increase its shareholding in Thomas Cook India (TCIL) from 40 per cent to 60 per cent through an open offer.

The offer price for the scheme, which opens on October 16, has been revised from the original Rs 351.68 per share to Rs 361.07.

After the completion of the capital restructuring, the total foreign holding will be 61.69 per cent including an additional 1.69 per cent held by foreign institutional investors (FIIs), said sources. Foreign equity investment (which does not include the premium on the shares) will, therefore, be Rs 8.99 crore.

The maximum purchase consideration, including the premium, in the case of full acceptance of the offer will be Rs 105.3 crore.

Though the original offer price was Rs 351.68 per equity share of Rs 10, it has now been revised to Rs 361.07. The new price includes a 15 per cent interest (Rs 9.39 per share) on the original offer price as imposed by the Securities and Exchange Board of India (Sebi). The capital market regulator has imposed the penalty since the company delayed the offer by 65 days.

Following the global restructuring of the Thomas Cook group, TCAG and Eurocenter's plea for an exemption of an open offer in TCIL was endorsed by Sebi earlier this year, subject to approval by shareholders through a special resolution.

Shareholders, however, defeated the special resolution for approval of change of control.

Subsequently, the public announcement to that offer was ought to have been made by June 27 (within four working days of declaration of the results of the EGM) as per Sebi guidelines. But the company failed to meet that deadline.

According to the offer letter, the 20 per cent shareholding, aggregating to 29,16,667 fully paid-up equity shares in TCIL, will be acquired by Thomas Cook AG in association with its wholly owned subsidiaries Eurocenter Beteiligungs-und Reisevermittlung GmbH and Thomas Cook Overseas Ltd. Thomas Cook Overseas currently holds the 40 per cent in the Indian company.

J M Morgan Stanley has been appointed the lead manager to the offer. According to the offer document, the promoters -- Thomas Cook Overseas -- holds 40 per cent shares, aggregating 58,33,333 equity shares. Financial institutions hold 0.22 per cent stake (32,051 shares), banks have 15.22 per cent and mutual funds hold 5.18 per cent. While NRIs and OCBs have 0.32 per cent shareholding, the balance 1.69 per cent is held by the foreign institutional investors.