IHH Healthcare, a Malaysian healthcare giant, has reaffirmed its commitment to the Fortis open offer. The company is keeping the share price unchanged at Rs 170. This development follows crucial clearance from the Securities and Exchange Board of India (SEBI) for the bid. IHH seeks to acquire a 26 per cent stake in Fortis Healthcare. This offer’s completion is anticipated by the fourth quarter of 2025.
IHH Healthcare’s Enduring Fortis Open Offer
Malaysia’s IHH Healthcare acquired a 31.1 per cent stake in the Indian hospital chain seven years ago. Recently, the company received SEBI approval to proceed with its open offer. This significant regulatory nod clears the path for IHH. It allows them to increase their holding in Fortis Healthcare. The offer price remains steadfast at Rs 170 per share for the additional 26 per cent stake. Importantly, eligible shareholders will also receive an interest payment of Rs 53.80 per share.
Indeed, this long-awaited approval resolves a protracted dispute. This dispute significantly delayed IHH’s investment in Fortis Healthcare. It signals regulatory clarity. Furthermore, it boosts investor confidence.
Details of the Offer and Shareholder Entitlements
The offer price for the Fortis open offer stands at Rs 170 per share. Additionally, applicable interest of Rs 53.80 per share is payable exclusively to eligible shareholders. This interest accrues at 10 percent per annum. It is calculated from the Supreme Court of India’s order dated September 22, 2022. The calculation continues until the actual payment date for tendering shareholders.
This specific entitlement applies to shareholders. They must have held Fortis shares as of December 4, 2018. Also, they must have continuously remained shareholders up to the identified date. Consequently, this provision ensures compensation for long-term investors. It addresses the delays encountered.
Background and Regulatory Hurdles for the Fortis Open Offer
In 2018, IHH secured a Rs 4,000-crore agreement. This deal aimed to acquire a 31.1 per cent stake in Fortis. IHH outperformed its competitors in this bid. Subsequently, the open offer for an additional 26 per cent stake was scheduled. This offer was valued at Rs 3,300 crore. It was set to begin in December 2018 and conclude in January 2019.
However, the Supreme Court issued a status quo order in December 2018. This action pertained to the sale of controlling stakes in Fortis Healthcare to IHH. The order followed a plea by Daiichi Sankyo. This plea related to its acquisition of Ranbaxy Laboratories. It effectively halted the open offer for an additional 26.1 per cent stake.
Fortis Malar Hospitals: A Parallel Open Offer
Concurrently, a parallel open offer exists for Fortis Malar Hospitals. The offer price for Fortis Malar is Rs 17.6 per share. It also includes an interest payment of Rs 18.36 for eligible shareholders. Both the Fortis Open Offer and the Malar Open Offer are expected to finalize in the fourth quarter of 2025. This completion is contingent on no unforeseen circumstances.
Frequently Asked Questions
Q1: What is the primary development regarding IHH Healthcare and Fortis Healthcare?
A: IHH Healthcare has maintained its open offer price at Rs 170 per share for a 26 percent stake in Fortis Healthcare. This decision follows SEBI’s clearance of the long-delayed offer.
Q2: Who is eligible to receive the interest payment in the Fortis open offer?
A: Eligible shareholders are those who held Fortis shares as of December 4, 2018. They must also have continuously remained shareholders until the identified date. These shareholders will receive interest at 10 percent per annum from September 22, 2022.
Q3: When is the Fortis open offer expected to be completed?
A: Both the Fortis Open Offer and the Fortis Malar Open Offer are anticipated to be completed in the fourth quarter of 2025. This assumes no unexpected issues arise.
References
- IHH Healthcare keeps Fortis open offer price unchanged at Rs 170/share – ETHealthworld
- Fortis Healthcare Shares Jump 6.62% After SEBI Clears IHH’s Long-Pending Open Offer – HDFC SKY
- IHH Healthcare Gets SEBI Nod to Proceed with Fortis Open Offer After Seven Years – ETHealthworld
- IHH Keeps Fortis Offer Price Unchanged at Rs 170 – Rediff Money
- Fortis Healthcare (FORH IN): Indian Regulators Cleared Long-Awaited Open Offer of IHH – Smartkarma
- Fortis Rally Backed By IHH Stake Buy; SEBI Analyst Sees Healthy Says ‘Multibagger’ Setup Emerging – Stocktwits
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