He considered that Thomas Cook India’s two business segments (travel/related services and financial services) had distinct potential when it comes to growth and cash flow generation. Analyzers called massive growth potential in the travel business (although it would need additional investment), while the foreign exchange segment had limited growth potential, but generated considerable cash flow.
The ownership changed several times in a short period of time, and the stock price had dropped considerably. Can the purchase Thomas Cook’s operation in India be in accordance with the philosophy of value investing, to which Fairbridge Capital alongside Fairfax Financial, the parent company, are devoted to? Was Thomas Cook was it better off split into two or India worth more with two sections? Eventually, should Fairbridge delist Thomas Cook India or make sure it remains public?
Learning Objective: This case is designed for a course on corporate finance that concentrates on the comparison of private and public equity investment, private investment in public equity or acquisitions.
The case may also be used in a class on finance strategy.
Publication Date: 10/08/2015
This is just an excerpt. This case is about Finance
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