US-based Ebix Inc and India-headquartered MakeMyTrip Ltd have joined the race to acquire cash-strapped travel company Cox & Kings Ltd, two people familiar with the development told ET. The online businesses are drawn by the prospect of acquiring the high-end, outbound, loyal customers of one of the country’s oldest brick-and-mortar travel companies, they said.
Talks are being held with Cox & Kings promoter Peter Kerkar, with a little over 21% stake, and Yes Bank, which acquired 18.55% after invoking shares pledged with it against debt, said the people cited above. “The potential acquisition of Cox & Kings by Nasdaq-listed MakeMyTrip is a natural extension that will help in ramping up business in acquiring sticky customers,” said one of the persons quoted above.
Nasdaq-listed Ebix acquired Indian online travel company Yatra for $337.8 million (₹2,300 crore) last month and is looking at swiftly ramping up local operations. Ebix has also made a bid for Mumbai-based Trimax IT Infrastructure & Services, which is undergoing bankruptcy proceedings.
Kerkar didn’t respond to queries; nor did Ebix chief executive Robin Raina. A MakeMyTrip spokesperson declined to comment. A Yes Bank spokesperson said, “As a policy, we do not comment on individual companies.”
In the past few years, Ebix has spent about $1 billion on acquisitions in India to fortify its presence in travel and tours. “In case Ebix manages to acquire the company, it means huge complementarity to the business model that offers online travel services through Yatra,” said a person cited above.
Sources said the valuation will depend on the haircut lenders will take. The Cox & Kings stock has taken a beating over the past four months because of loan repayment difficulties. Since April 1, its market value has plummeted 93% to ₹183 crore based on Friday’s closing price of ₹10.39 on BSE, from ₹2,485 crore. The promoter’s holding has been dropping continuously—to 39.73% at end of June, from 49.8% three months earlier. The stake has declined further with Yes Bank invoking the share pledge for 18.55%.
The company had total noncurrent debt of ₹1,240 crore and short term borrowings of ₹1,704 crore on a consolidated basis, according to the FY19 annual report. It has other financial liabilities of about ₹1,500 crore.
Source: Economic Times