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Analysts value Thomas Cook India at Rs 1,400 cr

Ruchika Chitravanshi  |  New Delhi 

UK-based travel company Thomas Cook has started speeding the sale process of its stake in the India business. According to people in the know, the transaction is being done in a two-way bid process, where 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 latest by June.

Two global analysts, who did not want to be named, told Business Standard the market expectation is that bidders could offer Rs 80-90 a share for the 77.1 per cent stake in the company. Going by these estimates, the sale could happen between Rs 1,300-1,400 crore.

Thomas Cook India shares closed at Rs 67.8 on Thursday, down 3.3 per cent, as the Bombay Stock Exchange benchmark index fell 2.3 per cent.

An analyst reasoned the sale may take place at a premium because the potential buyer would look at getting a controlling stake in the company. The bid price is likely to keep into account components like non-compete fee, brand licensing charges, and asset value of Thomas Cook’s office and retail outlets across India, he added.

Among those in the fray to pick up the Thomas Cook India stake are UK-based Travelex, several private equity and global investment firms, including Kohlberg Kravis Roberts, Carlyle Group, Everstone Capital, T A Associates, and Actis. One of the largest gold financing non-banking financial company Muthoot Finance, China-based travel and hospitality group HNA and Bravia Capital of Hong Kong also placed their expression of interest last week.

Thomas Cook India refused to talk on the matter. The parent company, with a debt of around £2 billion, decided to put the profitable Indian unit on the block recently, in an effort to clean its books. Thomas Cook India managing director Madhavan Menon recently got a three-year extension, till 2015.

Apart from the 77.1 per cent stake held by the parent company, the remaining 23 per cent is with foreign institutional investors, corporate bodies, banks and mutual funds. Of this, Thomas Cook India holds 3.9 per cent.

First Published: Fri, March 23 2012. 00:47 IST