Feb. 05--MUMBAI -- Travel firm Thomas Cook (India) Ltd on Tuesday said it is in preliminary discussions with various travel and holiday companies for an acquisition, including Chennai-based vacation ownership firm Sterling Holiday Resorts (India) Ltd.
In a statement to the stock exchanges, Thomas Cook said that "as on date there have been no definitive proposals that have been considered and approved by the board of directors of the company."
Sterling Holiday said its board of directors had not discussed any acquisition proposal.
"The company in its ordinary course of business evaluates various investment opportunities into the company. In this regard, several investors have approached the company including Thomas Cook. However, as on date, there is no definitive proposal considered or approved by the board in its board or committee's meeting," Sterling informed stock exchanges.
On Tuesday, The Economic Times reported that the Prem Watsa-controlled Thomas Cook was in advanced talks to buy Sterling Holiday at a 36% premium to the firm's market price.
Calls made to Sterling and Thomas Cook executives did not elicit any response.
Sterling Holiday, launched in 1986, pioneered the timeshare concept in India but the company wasn't able to deliver on its early promise.
Sterling started turning around after private equity firm Bay Capital Investment Partners Ltd invested $13.8 million in it in 2009 and R. Subramanian, Sterlings's chairman and managing director, ceded management control.
In 2010, stock market investors Rakesh Jhunjhunwala, Radhakrishna Damani and others invested Rs.120 crore in the company.
Sterling Holiday competes with Mahindra Holidays and Resorts India Ltd, the country's largest vacation ownership company, which along with Sterling, dominates India's timeshare market.
Thomas Cook is promoted by Canada's Fairfax Financial Holdings Ltd through its wholly owned subsidiary Fairbridge Capital.
Shares of Thomas Cook gained 5.35% to close at Rs.82.75 each on Tuesday on BSE, while the benchmark index, Sensex, inched up 0.01% to close at 20,211.93 points. Shares of Sterling Holiday rose marginally by 0.82% to Rs.92.30 apiece.
Last month, Thomas Cook's rival company Cox and Kings Ltd, one of India's oldest travel agents, said the school trips division of its London unit had made its first acquisition outside of Europe as a part of a diversification plan, purchasing a site in Australia for an undisclosed value.
Thomas Cook on Tuesday said it has introduced 'university tours' to help Indian students better understand and shortlist suitable colleges for their studies in the US.
In September 2011, Cox and Kings, through its UK unit Prometheon Holdings (UK) Ltd, acquired UK-listed specialist travel company Holidaybreak for Â£312 million in cash, marking the biggest overseas acquisition by an Indian travel company and the ninth acquisition by Cox and Kings.