IHH Healthcare makes open offer for Fortis Malar at Rs 60 per share

The offer was to acquire up to 4,894,308 fully paid-up equity shares with face value of Rs 10 each

The new owners of Fortis Healthcare Ltd (FHL) have launched an open offer for 26 per cent of Fortis Malar Hospitals Ltd’s shares, a step-down subsidiary of FHL, at Rs 60.1 per share.

Northern TK Venture Pvt Ltd (NTKV) together with IHH Healthcare Berhad and Parkway Pantai Ltd have made an open offer to public shareholders of Fortis Malar to acquire up to 4,894,308 fully paid-up equity shares with face value of Rs 10 each. 

This represents 26 per cent of the voting share capital of the target company, Fortis Malar said in a statement to the BSE on Wednesday. 

Fortis Malar stock ended the day’s trade at Rs 57.75 per share, up 1.3 per cent on the BSE. 

This open offer is a mandatory indirect open offer made by NTKV, IHH and Parkway Pantai. At the time the deal between IHH and Fortis was announced, the former had said a mandatory open offer for public shareholders of Fortis Malar Hospitals would be made at a price determined under Regulation 8 of the Substantial Acquisition of Shares & Takeovers (SAST) Regulations. 

Earlier in March, Manipal Health Enterprises had launched an open offer for 26 per cent of Fortis Malar at Rs 64.45 per share that was triggered following an announcement by Fortis Healthcare to demerge its hospital business and merge it with Manipal in a Rs 39 billion deal. 

The deal fell through and after multiple rounds of bidding, Malaysia's IHH won the race to acquire Fortis in July. 

In June, FHL had withdrawn the scheme of arrangement and amalgamation between its step-down subsidiary Fortis Malar Hospitals, a listed entity, and its diagnostics arm SRL Ltd, citing delay in completion of the process and strong headwinds in the sector. The plan was proposed around August 2016, and ideally should have taken six to eight months to complete. 

According to the original plan, FHL was to hive off its diganostic arm SRL to Fortis Malar Hospitals. SRL and Fortis Malar was to become one entity and be called SRL. In turn, Fortis Malar was to sell its Chennai to FHL by way of a slump sale for Rs 430 million. The promoter and promoter group held 62.71 per cent in Fortis Malar. 

HSBC Securities and Capital Markets (India) Private Limited, HDFC Bank Limited, Citigroup Global Markets India Private Limited and Deutsche Equities India Private Limited are the joint managers to the open offer.