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9 Feb, 2014

Thomas Cook India buys Sterling Holiday for Rs 870cr – The Times of India

MUMBAI, TNN | Feb 9, 2014: Billionaire investor Prem Watsa-backed Thomas Cook India is acquiring vacation ownership pioneer Sterling Holiday Resorts India for Rs 870 crore, marking its foray into the hospitality sector. This is Thomas Cook India’s second purchase after Ikya Human Solutions in February 2013.

To be completed by the fourth quarter of this year, the Sterling transaction structured through a multi-layered process, involving both cash and stock swaps, will become a 100% unit of Thomas Cook India.

In the first stage, Thomas Cook India will invest Rs 187 crore through a preferential allotment, giving the tour operator around 23% stake in Sterling Holiday. It will then acquire another 23% from key Sterling shareholders including Siddharth Mehta’s Bay Capital, ace stock brokers Rakesh Jhunjhunwala and Radhakrishna Damani. This triggers the mandatory open offer for another 26% stake as per regulatory norms, for which Thomas Cook India will shell out Rs 230 crore. The open offer price has been fixed at Rs 98, which is little more than Sterling Holiday’s Friday closing price of Rs 93.

Read the rest: Thomas Cook India buys Sterling Holiday for Rs 870cr – The Times of India.