Fortis Healthcare on Friday said that its board has unanimously accepted a binding offer from Malaysia's IHH Healthcare Berhad to invest Rs 4,000 crore in it by way of preferential allotment at Rs 170 per share. The company received two binding proposals from IHH and TPG-Manipal consortium after months of looking out for an investor.
Munjals-Burmans combines, which had earlier become the preferred bidder and Radiant Life Care had backed out.
Under the accepted offer, IHH would infuse Rs 4,000 crore through subscription to the preferential allotment at a price of Rs 170 per share, said Fortis in a statement.
A mandatory open offer will then be made to public shareholders by the Malaysian firm, for 26 per cent of the outstanding shares post issuance.
“The proposal provides for refinance of debt to the extent of Rs 2,500 crore", said the company. The funds infused would be used towards completion of acquisition of assets of RHT, SRL private equity minority shareholders and short-term liquidity needs, it said.
A mandatory open offer for public shareholders of Fortis Malar Hospitals Ltd would also be made at a price as determined under Regulation 8 of the SAST Regulations, the company added.
Commenting on the development, 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, he added.
"The release of the Audited FY 2018 financial statements was a key milestone in underpinning the overall success of the transaction," Rajagopal said, adding the board looked "forward to continuing the dialogue with our shareholders ahead of the EGM to approve the transaction".
Fortis said its board chose the offer from IHH after considering all key parameters such as significant primary funds infusion at highest available bid price (Rs 170/share) and sufficient funds commitment for future requirements.
The offer is at 20 per cent premium to current market price, it said, adding that the IHH proposal offers significant deal certainty given a simpler transaction structure and requirement for fewer approvals and a shorter timeframe.
It also provides an exit opportunity for shareholders through the open offer, in case they desire, Fortis said.
Three bidders (IHH, TPG-Manipal consortium, Hero-Burman consortium) were invited to participate, while Fortis received an expression of interest from Radiant-KKR consortium.
The diligence access and management interaction were offered to all the four bidders, Fortis said.