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Fortis bid won by Malaysia's IHH Berhad, to invest Rs 4,000 cr
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SME Times News Bureau | 14 Jul, 2018
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.
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