IHH unable to proceed with Fortis open offer after SC stay on stake sale

IHH Healthcare, however, said the apex court's order does not impact acquisition of 31.1% stake in Fortis for Rs 40 billion, which was completed on November 13

Malaysia's IHH Healthcare Bhd said on Monday its open offer to buy an additional 26 per cent stake in Fortis Healthcare Ltd will not proceed as per the timeline following a court ruling.

Cash-strapped Fortis accepted IHH'S investment offer in July after an extended bidding war for control of the company which operates about 30 private hospitals in India.

Under the deal, IHH will pay Fortis Rs 40 billion for 31 per cent stake, and then bid for another 26 per cent as per Indian regulations, offering up to Rs 33 billion.

The Supreme Court on Friday ordered status quo be maintained with regard to sale of the controlling stake in Fortis, after Japan's Daiichi Sankyo Co Ltd filed a contempt plea against Fortis founders Malvinder Singh and Shivinder Singh, according to a CNBC TV18 report.

Daiichi argued that Singh brothers created encumbrances on 1.2 million shares of Fortis in violation of court orders, the report added. The court has issued notices to the Singh brothers.

Meanwhile, Fortis said on Saturday it was not a party to the judicial proceedings and that the proceedings were solely related to the ex-promoters, who are no longer a part of the company.

IHH said the order does not impact the share subscription with Fortis which was completed on Nov. 13.

Shares of Fortis fell as much as 3.7 per cent to Rs 136.20 in heavy trading, with more than 3.1 mln shares changing hands by 0806 GMT, compared with their 30-day average of 2.6 mln shares.