Fortis Board approves Rs. 4,000 crore bid of IHH Healthcare
The company's board accepted the binding investment proposal at the highest bid price of Rs. 170 per share, which is close to the stock's 52-week high and a 20 per cent premium to its current price.
The funding proposal from the Malaysian-Singaporean private healthcare group gives Fortis ample liquidity in form of Rs. 4,000 crore in equity solution and provides an exit to private equity (PE) investors of SRL. The fund will also be utilized to complete RHT acquisition.
The deal will lead to a Mandatory Open Offer to 26 per cent shareholders of Fortis as per the SAST Regulations at price not less than Rs. 170 per share post the equity investment by IHH. The investment proposal also provides for refinancing of debt of approximately Rs. 2,500 crore. The deal is subject to regulatory approvals.
Elaborating on the rationale of the deal, the company stated that the deal provides significant certainty, simpler deal structure, requires fewer approvals and offers a shorter timeframe. Through this deal, the company expects to achieve scale driven operational synergies and expansion of the Fortis brand.
During Friday's pre-opening session at 9:05 hours, the stock of Fortis Healthcare was trading at Rs. 146.50 per share, up by Rs. 4.35 or 3.06 on BSE.