Fortis shareholders to decide on IHH offer

Indian hospital operator manages to proceed with EGM

PETALING JAYA: India’s high court has refused to block a planned Fortis Healthcare Ltd extraordinary general meeting (EGM) to get shareholders’ approval for IHH Healthcare Bhd’s proposed plan to acquire Fortis.

With this latest development, it appears that the earlier perceived roadblock to this IHH-Fortis deal has been lifted following initial expectations for the planned deal to possibly be put on pause again after a court order in India.

The pause in the IHH-Fortis deal was widely anticipated after the Nikkei Asian Review reported late last week that Japanese drugmaker Daiichi Sankyo filed a court order through the Delhi High Court.

Bloomberg reported that Daiichi Sankyo had earlier applied to the court to bar Fortis’ board meeting from making any decisions.

Fortis’ lawyer C.S. Vaidyanathan was quoted as saying that the company had nothing to do with the Singh brothers and that it was not involved in the Daiichi Sankyo case in any manner.

The EGM by Fortis to decide on this matter will be held today.

The brothers who founded Fortis – Malvinder and Shivinder Singh – were ordered in January to pay 35 billion rupees (RM2.075bil) in damages to Daiichi Sankyo over the sale of Ranbaxy Laboratories, which is a generic drug maker.

The earlier report by the Nikkei said that the Singh brothers were found to have withheld critical information from Daiichi Sankyo when they sold their stakes in Ranbaxy in 2008.

With the payment yet to be made, Daiichi Sankyo is protesting against the Fortis sale, and it was reported that the court order could have delayed the original timeline of the acquisition.

However, observers noted that the deal might still be put on hold should the new Khazanah Nasional Bhd leadership steer IHH away from acquiring Fortis.

“This is another wild card to take note of. “No money has changed hands yet.

“So it is still not too late if they decide to change their minds to avoid this acquisition after the recent history with tycoon Ananda Krishnan’s bet on Aircell that did not materialise as planned,” an observer said.

Aircell, which is 74% owned by Maxis Communications Bhd, had filed for bankruptcy in February this year.