Fairfax Financial buys Thomas Cook India stake

REUTERS: Canada’s Fairfax Financial Holdings Ltd will buy Thomas Cook Group Plc’s 77 per cent stake in its India operations for about $ 150 million, as the UK holiday firm continues to pay down its debt.

Property and casualty insurer Fairfax’s unit Fairbridge Capital will pay 50 rupees per share of Thomas Cook (India) Ltd. for a total of Rs. 8,174 million.

The offer represents an 18 per cent discount to Thomas Cook India’s closing price of Rs. 61.05 on Monday on the National Stock Exchange.

In February, Thomas Cook confirmed that it was seeking a buyer for its stake in its Indian unit in an effort to reduce its 890 million pounds debt.

Fairfax’s CEO Prem Watsa, a value investor whose approach and acumen is sometimes compared to Warren Buffett’s, said Madhavan Menon will continue as Thomas Cook India’s CEO.

Watsa, an Indian-born Canadian investor who took control of Fairfax in 1985, also sits on the board of Research in Motion and holds a 19 per cent interest in pulp and paper company Abitibibowater.