Malaysia’s IHH Healthcare Bhd set to take over of Fortis with $1.1 billion bid

Vastavam web: Malaysia’s IHH Healthcare Bhd is set to take control of India’s Fortis Healthcare after its bid of up to $1.1 billion was chosen over a rival’s, giving it ownership of over 30 hospitals amid a private healthcare boom in India.IHH’s 170 rupees per share offer for as much as 57 percent of Fortis was chosen on Friday over a joint bid from Indian firm Manipal Health Enterprises Ltd and U.S. private equity firm TPG Capital.

The offer represents a roughly 20 percent premium to its last closing price and caps a months-long bidding war for control of the Indian company that drew interest from domestic and international suitors.“The cash repairs the balance sheet and the tender offer should clean out a lot of the banks that could have led to an overhang of stock, which the other offer (TPG-Manipal) didn’t have … We plan to support it and think the bid will go through,” an investor among Fortis’ top 10 told Reuters.

IHH’s offer is slightly lower than the 175 rupee offer it had proposed earlier, but the investor said it was “not a bad outcome considering how long it has taken and how badly managed the process has been.”“It’s a very straightforward deal. Given the problems Fortis has, this is the best they can get at this time,” said Nitin Agarwal, an analyst with IDFC Securities.

Fortis has struggled with a cash crunch, rising debt, and image problems.Indian regulators are looking into allegations that its founders took funds from the company. The two founders, who have since left the company, deny wrongdoing.Fortis said it will call a shareholder’s meeting at the earliest to seek approval for the IHH bid.