Fortis Healthcare board on Friday approved Rs 4,000-crore offer from Malaysia’s IHH Healthcare for 31.1 per cent stake in it, valuing the cash-strapped firm at Rs 8,880 crore thus ending months of takeover battle.IHH Healthcare, which is expected to gain majority control of India’s second-largest hospital chain after a mandatory open offer for an additional 26 per cent stake, said in the long term it would rebrand Fortis hospitals into its own Gleneagles chain. The Malaysian healthcare major which offered to infuse the capital at Rs 170 per share pipped rival Manipal-TPG combine’s Rs 2,100-crore offer at Rs 160 per share.
“The transaction is expected to be completed within seven business days of receipt of shareholders’ and CCI’s approval, which will be obtained concurrently with shareholders’ approval and can take approximately 60-75 days,” Fortis Healthcare said in a statement.
Commenting on the development, Fortis Healthcare Chairman Ravi Rajagopal said the IHH proposal offered a more strategically and financially compelling proposition along with simplicity and certainty.
“We are now putting Fortis on a path of survival, future growth and prosperity in partnership with IHH,” he said in a conference call. IHH’s offer is the third one that Fortis has approved this year.
Founders Malvinder and Shivinder Singh’s loss of shareholding due to debt triggered the bidding war for cash-strapped Fortis. Also, there were allegations that they took funds from the company, a charge that the duo, who have since left the company, denied.
The Fortis board had first accepted a merger offer from Indian firm Manipal Health Enterprises and US private equity firm TPG Capital.