Mumbai: Tour operator Thomas Cook and resort ownership provider Sterling Holiday Resorts have announced merger in a cash and stock deal of Rs 870 crore. The deal will close by the end of 2014. Thomas Cook will invest Rs 187 cr in Sterling by preferential allotment of shares and buy shares from shareholders for Rs 176 cr, holding a mandatory open offer for Rs 230 cr.
The share swap ratio for the merger has been fixed at 120 shares of Thomas Cook for every 100 shares of Sterling Holiday.
According to Ramesh Ramanathan, MD, Sterling Resorts, the merger will help them expand their resort base.
Announcing the merger on Saturday, Thomas Cook Managing Director Madhavan Menon said, Thomas Cook will now be able to sell Sterling resorts to its own customers, adding one more service to offer to their customers.
Sterling business has been dipping as it faced competition from new players such as Magic Holidays and Cirtus Check Inn as also Mahindra Holiday Resorts.
Subsequently, Bay Capital took it over in 2009 and Siddharth Mehta took over as chairman of Sterling. Mehta inducted Ramanathan from Mahindra Holiday Resorts. Thereafter they were able to add 3,409 new vacation ownership members in 2013. Net loss also got reduced to Rs 20 cr from Rs 40 crore the previous year.
Sterling Holiday Resorts has currently a base of around 67,000 active vacation ownership members.
See Also: Sterling Holiday to merge with Thomas Cook - Share swap fixed at 12:10 in deal that values Sterling at Rs 870 cr; Bay Capital, Jhunjhunwala to exit
