Fortis board meets today, IHH emerges front runner to buy controlling stake

The possible acquisition will allow the IHH to expand its footprint across the country

Malaysia-headquartered IHH Healthcare Berhad has emerged as a front runner to acquire controlling stake in Fortis Healthcare, sources aware of the matter said.

The board of Fortis Healthcare will meet on Friday to discuss fundraising plans, ending an intense four-month-long takeover battle. 

IHH, which is expected to pip TPG backed-Manipal Hospital in the acquisition race, is believed to have offered Rs 180 per share for Fortis Healthcare's assets.

Two other suitors — Hero Enterprises-Burmans and Radiant Enterprises — backed out of the race in the last leg. Bid conditions make it mandatory for the suitors to have a minimum investment of Rs 15 billion and provide exit to institutional investors.

The possible acquisition will allow the IHH, which runs seven hospitals in the southern and western parts of India with 1,600 beds, to expand its footprint across the country. Fortis is the second-largest healthcare chain in the country and has under its belt 45 healthcare facilities and 300 diagnostic centres.

Last week, IHH Healthcare’s managing director Tan See Leng told journalists in Malaysia that successful bid for Fortis would be a springboard for IHH plans in India and that the acquisition would transform the company's entire India landscape.

The Malaysian chain’s Indian business contributed Rs 12 billion in revenue, which was around 6 per cent of total in 2017. 

IHH’s first hospital in India was set up in Kolkata in 2002 through its joint venture with Apollo Hospital. But, the company largely remained a passive investor till 2015 when it acquired 51 per cent stake in Continental Hospitals in Hyderabad and later 73.4 per cent stake in Global Hospitals.