See 50% upside in Thomas Cook , says Rajen Shah, CIO, Angel Broking.
Shah told CNBC-TV18, "Thomas Cook is a 130 years old company and has presence in about 75 cities, almost about 200 branches and almost about 153 are owned that is what the press release of Thomas Cook mentioned yesterday. If you work out the real estate value that would be somewhere around Rs 400-450 crore and the market cap is about Rs 1,150 crore or so."
He further added, "But the interesting thing we just did a small comparison and arrived at a fair value for Thomas Cook. If you see Cox & King this year it will report about Rs 650 crore of revenue and the market cap is about Rs 2,600 crore, so it's trading at about four times whereas if you see Thomas Cook this year it will report about Rs 350 crore. So if you apply four times it works out to around Rs 1,400 crore."
"Normally when the companies are bought over or taken over, it's at a significant premium 15-20% higher than the actual value of the company. So the deal could happen around Rs 1,700 crore or so. That makes Thomas Cook stock priced at about Rs 81. So I think that the deal may happen around Rs 80-81 and since the promoters own 77% and they will have to come out as per the new guidelines, 25% open offer, a 100% of the shares with public will be getting absorbed, picked up by the new buyer. So I think there is another 50% kind of upside possible in Thomas Cook. So another circuit is possible today in the morning."
