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

After months of searching for an investor, cash-strapped Fortis Healthcare today 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.

In a statement, Fortis said under the accepted offer, IHH would infuse Rs 4,000 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, SRL private equity minority shareholders and short term liquidity needs.

A mandatory open offer for public shareholders of Fortis Malar Hospitals Ltd would also be made at a price as determined under Regulation 8 of the SAST Regulations, the company added.

The company said its Board considered merits of both the binding bids and took into account recommendation of its Financial Advisors (Standard Chartered Bank and Arpwood Capital) and the legal advice from Legal Advisors (Luthra & Luthra Law Offices and Cyril Amarchand Mangaldas), in approving IHH's offer.

Commenting on the development, Fortis Healthcare Chairman Ravi Rajagopal said, "The IHH proposal offers a more strategically and financially compelling proposition along with simplicity and certainty."