Ivey Publishing

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Fairfax and Thomas Cook India: Permanent Capital, Private Equity and Public Markets
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16 pages (8 pages of text)
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Case (Field)
In March 2012, the CEO of Fairbridge Capital considered the pros and cons of the potential acquisition of Thomas Cook India. He believed that Thomas Cook India’s two business segments (travel/related services and financial services) had different potential in terms of growth and cash flow generation. Analysts predicted tremendous growth potential in the travel business (although it would require additional investment), while the foreign exchange segment had limited growth potential but generated significant cash flow. Thomas Cook India had changed ownership several times in a short time period, and the stock price had fallen substantially. Would acquiring Thomas Cook India fit the value-investing philosophy rigorously followed by Fairbridge Capital and its parent company, Fairfax Financial? If so, how much should Fairbridge bid? Was Thomas Cook India worth more with two segments or was it better off split into two? Finally, should Fairbridge delist Thomas Cook India or keep it public?
Learning Objective:
This case is designed for a course on corporate finance that focuses on acquisitions, private investment in public equity or the comparison of private and public equity investment. It allows for a discussion of emerging markets (in particular, India) and illustrates the differences between the U.S. and Indian financial markets. The case can also be used in a course on finance strategy.
International,  Finance
Other Services
India, Large, 2012
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