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IHH Healthcare wins race for Fortis, to invest Rs 4,000 cr

Malaysian firm will make offer to public shareholders for 26% of shares 

New Delhi: After months of searching for an investor, cash-strapped Fortis Healthcare on Friday said its board has unanimously accepted a binding offer from Malaysia’s IHH Healthcare Berhad to invest Rs 4,000 crore in it by way of preferential allotment at Rs 170 per share.

On July 3, the company received two binding proposals from IHH and TPG-Manipal consortium but Munjals-Burmans combines, which had earlier become the preferred bidder, and Radiant Life Care had backed out.

Fortis said under the accepted offer, IHH would infuse Rs4,000 crore through subscription to the preferential allotment at a price of Rs 170 per share.

The Malaysian firm will then make a mandatory open offer to public shareholders for 26 per cent of the outstanding shares post-issuance. The “proposal provides for refinance of debt to the extent of Rs 2,500 crore”, the company said, adding funds infused would be used towards completion of acquisition of assets of RHT, and SRL private equity shareholders.

Three bidders (IHH, TPG-Manipal consortium, Hero-Burman consortium) were invited to participate in the bidding.

The deal

  • Fortis said its board chose offer from IHH after considering all key parameters such as significant primary funds infusion at highest available bid price (Rs170/share) and sufficient funds commitment for future requirements.
  • The offer is at 20% premium to current market price, it said, adding the IHH proposal offers significant deal certainty given a simpler transaction and requirement for fewer approvals.
  • It also provides an exit opportunity for shareholders through the open offer, in case they desire, Fortis said.
  • IHH’s proposal also offers potential to achieve scale driven synergies on operational and financing front integrates Fortis into a large global healthcare platform with potential synergies, it added.
  • The reconstituted board of Fortis had on May 29 initiated a fresh bidding process to meet FHL’s long-term objectives.
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