IHH to takeover Fortis; to rebrand hospital chain to Gleneagles in future

Fortis Healthcare board today 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 Managing Director and CEO Tan See Leng said the company is willing to infuse more funds into Fortis if required.

"Currently we feel that Fortis would require about Rs 5,800-6,000 crore of funding. We are putting in Rs 4,000 crore," he said in a separate conference call.

Leng further said,"We are hoping to refinance and get some additional debt in the company and even after that if needed by Fortis, IHH remains open to exploring options for raising additional capital in consultation with other shareholders, including by way of rights issue, any other strategic solution involving capital markets or otherwise."
"We will respect all the licences and agreements that Fortis currently has for the brands but in the long term and going ahead we would like to rebrand the Fortis hospitals to our own brand, Gleneagles."