Tour operator Thomas Cook (India) Ltd, controlled by Canada’s investment firm Fairfax Financial Holdings Limited, has upped its holding in Sterling Holiday Resorts India Ltd to 41.7 per cent even as its open offer failed. The firm is yet to buy additional 13.13 per cent stake in Sterling Holiday as part of the share purchase agreement, which would give it a majority stake.
Thomas Cook, a tour package and travel related financial services company, managed to acquire just 0.01 per cent additional equity stake in Sterling Holiday in the open offer at an offer price of Rs 98 per share against its proposal to acquire up to 26 per cent stake. The offer opened on May 30 and closed on June 12. ICICI Securities was the manager to the open offer.
The tour operator had announced in February that it will merge its operations with Sterling Holiday Resorts in a Rs 870 crore part-equity, part-cash deal, as part of its efforts to get access to a wide selection of resorts in India and also abroad through partners.
The multi-layered deal involved the tour operator subscribing to nearly 20 million equity shares, comprising 22.86 per cent stake of Sterling Holiday pursuant to a preferential allotment, apart from acquiring another 19.94 per cent holding in Sterling Holiday Resorts from some of its shareholders.
The firm acquired 12.07 per cent additional stake in the company through open market purchases which has helped it push up its holding.
Following the acquisition of remaining 13.13 per cent stake, the total stake holding of Thomas Cook will rise to 54.87 per cent.
The company had earlier said that the merger is expected to close by the fourth quarter of 2014 and will give Thomas Cook access to Sterling Resorts’ 19 properties in 16 holiday destinations across India.
Post merger, Sterling Holiday Resorts will continue operations under the leadership of Ramesh Ramanathan with an independent board.
Thomas Cook India, which was acquired by Fairfax and its India affiliate Fairbridge Capital in 2012, is the local acquisition vehicle of Prem Watsa’s company. The deal came exactly a year after Thomas Cook (India) acquired 74 per cent stake in human resources staffing firm Ikya Human Capital Solutions for Rs 256 crore.
(Edited by Joby Puthuparampil Johnson)