IHH plans to launch counter offer for Fortis hospitals biz

Malaysia’s healthcare major IHH Healthcare Berhad is readying a counter bid for Fortis Healthcare's hospitals business.

The Fortis Healthcare shares rose as much as 6.85 per cent intra-day to Rs 154.50 on the BSE.

According to a

Bloomberg report, IHH plans to write to the Fortis board about its plans to make a counter offer.  The report added that the company is contemplating a cash offer for Fortis and is even considering taking its offer directly to shareholders if its approach is rejected by the board.  In 2017, there was talk that IHH was interested in Fortis but the company had denied the reports.

An IHH bid would further complicate the Fortis deal. The minority shareholders have expressed reservations and the ongoing case involving Fortis’ pre-deal promoters continues to cast its shadow on the merger. Fortis has been under a cloud as authorities investigate whether its founders, brothers Malvinder Singh and Shivinder Singh, who are no relation to the CEO, took funds from the company. The brothers have denied the allegations.

In an interview to BusinessLine in 2017, Ramesh Krishnan, Chief Executive of Parkway Pantai’s India operations, had said hospitals in India were ripe for the picking, adding that there was a readiness for consolidation.  Parkway Pantai is wholly owned by Malaysia’s healthcare major IHH Healthcare Berhad and investments done by it in India are executed and operated through Parkway. 

The company's last acquisitions in India were Hyderabad-based Continental Hospitals (₹310 crore) and Global Hospitals (₹1,284 crore), which later became Gleneagles Hospitals (a global IHH brand).

Meanwhile, Manipal Hospitals Enterprises Private Ltd has raised its offer to buy rival Fortis Healthcare Ltd's hospital business by about a fifth in an attempt to win over the minority shareholders opposed to the deal. The new offer values Fortis' hospital business about 21 per cent higher at ₹6,061 crore ($933.3 million), or ₹116 a share.

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