TCIL AND STERLING HOLIDAY RESORTS JOIN HANDS
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Thomas Cook (India) (TCIL) and Sterling Holiday Resorts India announced a merger between the companies recently. The transaction is expected to close by the fourth quarter of 2014, subject to customary closing conditions and regulatory approvals as required. The part equity, part merger deal is structured as a multi stage process - TCIL Group will make a Preferential Allotment Investment for approximately of Rs. 187 crores into Sterling; TCIL Group will purchase shares from Sterling shareholders for Rs. 176 crores; TCIL Group will make a mandatory open offer for Rs. 230 crores; There will be a merger between the two companies at a defined swap ratio of 120:100.
The merger brings significant synergies to both partners - with Thomas Cook India gaining access to Sterling Resorts’ network of 19 resorts in 16 holiday destinations across India.
The company also has 15 additional sites where it plans to add new resorts in the coming years. Sterling’s affiliation with Resort Condominiums International (RCI) - the global expert in exchange vacations, also allows its members to vacation in over 4000 RCI affiliated resorts all over the world.
Speaking post the announcement, Madhavan Menon, Managing Director, TCIL said, “Ramesh Ramanathan and his team at Sterling Resorts, are veterans who were instrumental in developing the Vacation Ownership category in India and we are delighted to partner them via this merger! The synergistic opportunities that this new partnership between Thomas Cook & Sterling Resorts offers are enormous, because they create multiple avenues to grow our respective businesses and to create valuable business opportunities together. As India’s leading integrated travel and travel related financial services Company, TCIL’s merger with Sterling Holiday Resorts reaffirms our commitment to our stated strategy of investing in mutually beneficial partnerships that broaden our business services platform to increase shareholder value”
Siddharth Mehta, Chairman, Sterling Holiday Resorts (India) Limited said, “The last few years have seen the resurgence of the Sterling brand in the Vacation Ownership and Leisure Holidays space. The investments we made in designing and delivering best-in-class holiday experiences through renovated and new resorts has yielded results in healthy year-on-year growth in Vacation Ownership sales and Resort Occupancy. Having brought Sterling to a position of strength in the market, I am now delighted Sterling is merging with Thomas Cook India as I see a significant opportunity to create a dominant market leader in the Travel & Leisure Holidays sector.
Ramesh Ramanathan, Managing Director, Sterling Holiday Resorts (India) Limited stated, “The merger with Thomas Cook will strengthen Sterling’s market position as there are multiple natural synergies which both companies will mutually benefit from. Thomas Cook customers will have access to our pan-India network of well located, full-service, quality resorts which offer great holiday experiences. Sterling stands to benefit from Thomas Cook’s iconic brand reputation and TCIL’s large base of domestic and inbound travel customers. There is also scope to add value to Sterling’s Vacation Ownership members through the synergies that exist between the two companies.”
Antique Group acted as advisor and ICICI Securities acted as merchant banker to Thomas Cook for this merger.