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TCG to get back Indian arm

MUMBAI: Thomas Cook Group plc (TCG) is acquiring up to 74.9 per cent of the issued share capital of Thomas Cook (India) Ltd. (TCIL) and 100 per cent in Thomas Cook branded businesses in Egypt as well as licences for the Thomas Cook brand in a total of 15 West Asian countries. Thomas Cook is acquiring the businesses from Dubai Financial Group LLC (DFG) for a total cash consideration of between 208 million euro (Rs. 1,276 crore) and 249 million euro (Rs. 1,527 crore), subject to the outcome of the open offer process which will follow. TCIL is listed on the Bombay and the National stock exchanges.

Under the terms of the TCIL transaction, Thomas Cook has agreed, through its U.K. subsidiary, to acquire at least 61.8 per cent and up to 74.9 per cent of TCIL’s share capital. In a private transaction with DFG, Thomas Cook will acquire 54.9 per cent of 74.9 per cent at Rs. 107 per TCIL share. Under the local stock market rules, Thomas Cook is tendering to acquire up to a further 20 per cent of TCIL shares in an open offer at the same price. As a result of this transaction, Thomas Cook will acquire between 61.8 per cent and 74.9 per cent of TCIL’s share capital, the price of which will range from 173 million euro (Rs. 1,061 crore) to 214 million euro (Rs. 1,312 crore) giving Thomas Cook control of the company.

Thomas Cook will pay a cash consideration equivalent to 35 million euro (Rs. 215 crore) to DFG for both the Egyptian business and the return of the brand licenses in the 15 West Asian countries. The licensing agreement with DFG for the brand in these 15 countries will be terminated. Consequently, Thomas Cook will now have exclusive ownership of the Thomas Cook brand worldwide. The transactions will be funded from the company’s balance sheet and are expected to close by the end of this month. The open offer for up to a further 20 per cent stake in TCIL is expected to close at the end of May.

TCIL was earlier controlled by Thomas Cook AG which sold its 60 per cent controlling stake in TCIL in January 2006.

The Egyptian business was sold in July 2006 to DFG at which point the Thomas Cook brand for the 15 countries in the West Asian region (including Egypt) was granted to DFG.

TCIL employs about 2,500 staff with a total retail network of about 180 outlets across 52 cities. About half of TCIL’s gross revenues is from foreign exchange and the other half is from the travel businesses.

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