Mahendra V Doshi, who merged his foreign exchange business LKP Forex with Thomas Cook India in 2006, Madhavan Menon, managing director, Thomas Cook India, financial service providers Piramal Capital and Tata Capital, are looking to bid for travel and tour operator Thomas Cook India, two people familiar with the development said.

Doshi, earlier executive director of Thomas Cook and brother-in-law Parag Mehta, the former head of foreign exchange business of Thomas Cook, are in talks with Actis Private Equity Fund to put in a joint bid.

?We are considering putting in a bid and some PE funds have approached us,? Doshi told FE on Wednesday. ?The valuation is

a concern.?

Madhavan Menon is in talks with private equity fund Everstone Capital to bid for 77% stake owned by British parent Thomas Cook India. Menon, who was traveling abroad, did not respond to a text message. An Everstone official too did not respond to request for a comment.

Piramal Capital, owned by Ajay Piramal, chairman, Piramal Healthcare and Tata Capital, the financial services arm of the diversified Tata Group, have taken the offer for sale document from investment banker Credit Suisse First Boston. Bidders have to submit their final bid by March 13.

?We are still collating information; so, it is too early to comment on the sale process,? says a Thomas Cook India spokeswoman.

?It will be an expensive buy and a big challenge at this valuation,? says an investment banker familiar with Thomas Cook India’s

operations. ?PEs will look to double their investment in five to

seven years.?

Between 2006 and 2008, Dubai Financial Group purchased Thomas Cook India for $70 million and sold it back to the British parent for $300 million, earning over four-fold returns. Thomas Cook India?s 77% is valued at $193.7 million based on the last traded price at R59.6 on the BSE on Wednesday.

n Continued on Page 2

Piramal Capital has been building its financial services business for the past two years and Tata Capital offers a full range of financial services.

?The parent has decided to sell 77% stake in Thomas Cook India and the buyer can use the brand for seven years,? Menon said after announcing its fiscal third quarter results on February 16.

?Forex is a tricky business,? PR Srinivas, senior director, Deloitte India told FE in an earlier interaction. ?Companies could suffer 8-10% losses if they do not have the correct business model.? Forex is an intrinsic part of travel companies as customers want everything under one roof, he added.

The parent ? which has been in India since 1881 ? strapped for cash at home had borrowed money and pledged their entire 77.1% stake with Royal Bank of Scotland. The travel company plunged into losses after revenues crashed as slowing economy hit in operations in Europe and political unrest in the West Asia and North Africa impacted business.

Thomas Cook Plc had announced its plans to raise 200 million pounds in December 2011 by selling some assets, which did not include Indian subsidiary. Thomas Cook Group has a heavy debt of 900 million pounds and reported 151 million pounds losses for the quarter ended December 31.

FE had reported on February 3 that the Royal Bank of Scotland had appointed Credit Suisse First Boston to find buyers for TCIL.

?There is a detailed two-stage process being conducted by Credit Suisse and it is yet to begin,? said Menon at a media interaction after announcing the results. ?But our intent is to finish it as quick as possible.?

Menon added the sale won?t be a ?distress? sale by the parent company and the entire operations of TCIL, forex and packaged holidays, would be sold as a single entity.

The Indian subsidiary reported a 33% drop in net profit to Rs 4.16 crore in the calendar fourth quarter as its financial service business, which contributes 60% of the business, suffered with the rupee depreciation. It had reported a Rs 6.22 crore profit in the same period in the previous year.

The company?s net sales rose 20% to Rs 75.01 crore from Rs 62.13 crore in the same quarter last year.