IHH Health to buy For­tis and SRL for $2.9 bil­lion

Hindustan Times ST (Jaipur) - - World - De­bor­shi Chaki de­bor­shi.c@livemint.com

DEAL STREET For­tis Hos­pi­tals to be val­ued at ₹14,000 cr, SRL at ₹5,000 cr

IHH Health Bhd of Malaysia, Asia’s largest health­care group is all set to buy a con­trol­ling stake in For­tis Health­care Ltd and SRL Di­ag­nos­tics Ltd con­trolled by for­mer Ran­baxy pro­mot­ers Malvin­der and Shivin­der Mo­han Singh in a deal, which val­ues the two com­pa­nies at close to $2.9 bil­lion in a com­bined val­u­a­tion, two peo­ple di­rectly aware of the de­vel­op­ment have told Mint on con­di­tions of anonymity.

“The fi­nal val­u­a­tion has been agreed upon and an an­nounce­ment in this re­gard is ex­pected in the next few weeks” said the first per­son cited above.

Ac­cord­ing to the per­sons cited above IHH will ini­tially buy a 26%pri­mary stake in For­tis, which will be fol­lowed by a manda­tory open of­fer to pub­lic share­hold­ers. Sep­a­rately, the IHH will also ac­quire a con­trol­ling stake in un­listed SRL Di­ag­nos­tics and listed For­tis Malar Hos­pi­tals Ltd, (a For­tis arm that runs a hospi­tal in Chen­nai) from the pro­mot­ers.

“Both sides have agreed to an over­all val­u­a­tion ₹14,000 crore for For­tis Hos­pi­tals and SRL at close to ₹5,000 crore, tak­ing the com­bined deal value to ₹19,000 crore or $2.9 bil­lion” the sec­ond per­son said. At the cur­rent val­u­a­tion, IHH which was rel­a­tively a late en­trant in the race to ac­quire the as­sets, will pay close to Rs 3600 crore for a 26% stake in For­tis. “The in­fu­sion of fresh eq­uity in For­tis Health­care will be be used by the com­pany to buy back Reli­gare Health Trust (RHT), a Sin­ga­pore listed busi­ness trust in which it owns 30% stake” said the per­sons cited above. “The buy­back is ex­pected to add an­nual sav­ings to the tune of ₹400 in ser­vice fee in the ebitda of the com­pany” the per­sons added.

Mint had re­ported in Jan­uary that global PE fund TPG Cap­i­tal had sub­mit­ted a bid for For­tis Health­care and in the merged en­tity of SRL Di­ag­nos­tics and For­tis Malar Hos­pi­tals, of­fer­ing to pay ₹3,000 crore for a 26% pri­mary stake in For­tis Health­care and another ₹1,500 crore for a ma­jor­ity stake in SRL Di­ag­nos­tics and For­tis Malar through a sec­ondary sale. In Au­gust, the board of For­tis Health­care had ap­proved the de­merger of the di­ag­nos­tics busi­ness and pro­posed to list it sep­a­rately through a re­verse merger with For­tis Malar Hos­pi­tals Ltd, a listed unit of For­tis Health­care. The com­pany cur­rently owns 62.9% in For­tis Malar, which runs a large hospi­tal in Chen­nai with an as­so­ci­ated di­ag­nos­tics busi­ness.

The deal is how­ever likely to face op­po­si­tion from by Dai­ichi Sankyo which moved Delhi High­court ear­lier this year to re­strain the Singh broth­ers from sell­ing as­sets, specif­i­cally For­tis Health­care Ltd. The firm said that the Singh broth­ers were look­ing exit For­tis Health­care which would ham­per re­cov­ery of dam­ages of ₹2,562 crore awarded by a Sin­ga­pore tri­bunal. The Delhi High court had in March di­rected the broth­ers fur­nish de­tails of all of their un­en­cum­bered as­sets, in or­der to en­sure the use of such as­sets to sat­isfy an ar­bi­tral award of over ₹2,562 crore, at a later stage, if re­quired.

Re­spond­ing to a query from Mint, an IHH Spokesper­son said “IHH is al­ways look­ing at value ac­cre­tive op­por­tu­ni­ties. How­ever, it is not ap­pro­pri­ate for us to com­ment on spe­cific trans­ac­tions and we will up­date the mar­ket if there are any ma­te­rial de­vel­op­ments”

A spokesper­son of RHC Hold­ings Pri­vate Lim­ited(the hold­ing com­pany of the Singh broth­ers ) said, “We can­not com­ment on spec­u­la­tion”. “With re­spect to your query on lit­i­ga­tion would like to say that the court or­der is ap­pli­ca­ble only in re­spect to the un­en­cum­bered as­sets to par­ties to the lit­i­ga­tion, namely RHC Hold­ing Pvt Ltd and Os­car In­vest­ments Ltd. The op­er­at­ing listed en­ti­ties of the group & its sub­sidiaries in­clud­ing For­tis and SRL, are not party to the lit­i­ga­tion.”

MINT/FILE

For­tis and SRL pro­mot­ers Shivin­der Mo­han Singh (left) and Malvin­der Mo­han Singh

REUTERS

Boe­ing chair­man and CEO Den­nis Muilen­burg and pres­i­dent (com­mer­cial air­planes) Kevin McAl­lis­ter at the launch of the Boe­ing 737 MAX 10, at the Paris Air Show on Mon­day

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.