New Delhi, Fortis Healthcare on Friday said its board has unanimously accepted a binding offer from IHH Healthcare Berhad of Malaysia to invest Rs 4,000 crore in it by way of preferential allotment at Rs 170 per share.
Last week, Fortis said that its board has received binding bids from IHH and TPG-Manipal consortium under the new transaction process.
“The Board of Directors of Fortis Healthcare unanimously decided to recommend the binding investment proposal from IHH Healthcare Berhad to invest Rs 4,000 crore by way of preferential allotment at a price per share of Rs 170,” a company statement said here.
“The proposal provides for refinance of debt to the extent of Rs 2,500 crore.”
The funds infused would be used towards completing the acquisition of assets of the Singapore-listed RHT Health Trust, SRL private equity minority shareholders and short term liquidity needs, the statement added.
IHH will make “a mandatory open offer to the public shareholders of Fortis as per the SAST regulations at price which is higher than Rs 170 per share or price determined under SAST regulations for 26 per cent of the outstanding shares post issuance”.
According to Fortis, in approving the IHH offer, its board considered the merits of both the binding bids and took into account the recommendation of its financial advisors, Standard Chartered Bank and Arpwood Capital and legal advice.
Providing the rationale for the decision, the company said the offer from IHH was chosen after considering all key parameters.
The offer is at 20 per cent premium to the current market price.
“(IHH) offers significant deal certainty given a simpler transaction structure and requirement for fewer approvals and a shorter time-frame and exit opportunity for shareholders given the open offer, in case they desire,” Fortis said.
It also “offers potential to achieve scale driven synergies on operational and financing front and integrates Fortis into a large global healthcare platform with potential synergies”.
Fortis Healthcare Chairman Ravi Rajagopal said: “The IHH proposal offers a more strategically and financially compelling proposition along with simplicity and certainty.
“The process was relaunched on May 29 and has been conducted in a fair, time-bound and transparent manner.”
Following the launch of the new transaction process, Fortis had received bids of four suitors — Hero Enterprise Investment Office and Burman Family Office, IHH Healthcare Berhand, Radiant Life Care and TPG Asia and Manipal Health Enterprises.
However, the Hero Enterprise-Burman Family combine, which had earlier become the preferred bidder, and Radiant Life Care withdrew their bid offers.