Moneycontrol Bureau
Shares of Thomas Cook (India) rose 5 percent touching a 6-year high of Rs 92 per share early morning on Monday while Sterling Holiday Resorts jumped 6.5 percent (1-year high) on its merger plan. Both the travel companies have announced a merger in a Rs 870-crore part-equity, part-cash deal to be executed in multiple stages.
Thomas Cook (India) will first inject Rs 187 crore for a preferential allotment of a 23 percent stake in Sterling. After that, it will buy stake from shareholders of the Chennai-based resort owner for Rs 176 crore.
This will trigger an open offer under Sebi norms and Thomas Cook will seek to buy up to 26 percent in Sterling for Rs 230 crore.
The equity swap ratio for the merger has been fixed at 120 shares of TCIL for every 100 shares of Sterling. The transaction is expected to be completed by December 2014, after obtaining mandatory clearances.
Sterling Holiday is valued at Rs 870 crore, TCIL Managing Director Madhavan Menon. said. Based on the equity investments and merger ratios, the aggregate value of the two companies is estimated at about Rs 3,000 crore, it said in a statement.
However, both the stocks lost steam intraday. At 10:54 hrs Thomas Cook (India) was quoting at Rs 82.55, down Rs 4.95, or 5.66 percent while Sterling Holiday Resorts (India) was quoting at Rs 93.10, up Rs 0.20, or 0.22 percent on the BSE.
(With inputs from PTI)
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