Fortis suitors look to buy shares from public and banks
MUMBAI: A bidding war is brewing for control of Fortis Healthcare Ltd, the hospital operator that has been without a defined promoter ever since the shareholding of founders Malvinder and Shivinder Singh dropped following the sale of their pledged shares by some lenders in February.
The TPG Capital-manipal Health Enterprises combine and IHH Healthcare Bhd could acquire shares from the public and banks to wrest control of Fortis, two people directly aware of the ongoing negotiations said, requesting anonymity. Currently, 80% of Fortis’s shares are with the public while 20% of pledged promoters shares are held by lenders Yes Bank Ltd and Axis Bank Ltd.
The acquisition of Fortis’s stock in small quantities will strengthen their position if they have to make an open offer for the target company’s shares from the public. “In this scenario, it is possible that both Tpg-manipal and IHH may come up with competing open offers,” said one of the two people cited above.
Under current regulations, acquisition of a 26% stake in a listed company has to be followed by a mandatory open offer. Regulations also stipulate that in a creeping acquisition situation, an acquirer with a stake below the 26% threshold is obliged to make a mandatory open offer if he or she is granted any special rights by the company’s board.
“Both sides are currently engaged in talks with Yes Bank and Axis Bank who together hold 20% of the pledged promoters share in Fortis as this will be key to gaining control of the company,” said the first person cited above. “Yes Bank, which owns a 17% stake in Fortis, may seek a minimum 15% premium but the numbers can change,” the first person said. Yes Bank declined to comment, while an email sent to Axis Bank remained unanswered until press time.
For both Tpg-manipal and IHH, a potential buyout of Fortis is likely to close at a significantly lower price than what they were previously negotiating with the Singh brothers. had reported in June last year that the Malaysian–singaporean company, IHH Healthcare, was close to buying 26% in Fortis from Malvinder and Shivinder Singh at a $2.9 billion valuation for Fortis and unit SRL Diagnostics. MUMBAI: Jet Airways on Wednesday said that it will introduce an additional 144 weekly flights as part of its summer schedule, starting March-end.
“As part of the new schedule, Jet Airways will strengthen connectivity between the country’s capital and the northeastern region,” Jet Airways said in a statement.
Jet Airways’ move to increase flights comes after the country’s aviation regulator Directorate General of Civil Aviation (DGCA) grounded 11 Airbus A320neo aircraft, powered by Pratt & Whitney engines, belonging to Indigo and Goair, causing both airlines to cancel several flights over the last two days.
The Naresh Goyal-led airline is also starting non-stop flights from Pune to Patna, Raipur and Chandigarh. It will begin a daily, non-stop service between Mumbai and Tiruchirappalli and Tiruchirappalli and Delhi.
“The upcoming robust connectivity between the Northeast and India’s financial as well as political capital is expected to provide a positive stimulus to the region’s economy, boosting tourism as well as development of business and trade, leading to enhancement of cargo movement,” Jet Airways added.
Jet Airways currently operates over 500 daily flights, said a spokesperson of the airline.
Operations at both Indigo and Goair are expected to be significantly disrupted in the run-up to the peak travelling season that starts in April. Flights that were cancelled during the last two days were mostly ones from the national capital and included busy routes like Delhi-mumbai, Delhi-kolkata, Guwahati-delhi, Indore-mumbai and Delhi-hyderabad.
Goair on Tuesday said that it had cancelled 18 flights (daily) till March 24 following the grounding of three of its aircraft. Indigo cancelled 48 flights on the same day. According to Kinjal Shah, vice-president of corporate rating at Icra, the grounded planes account for about 3% of the total fleet maintained by domestic airlines. Other airlines are looking to fill the supply vacuum created by the grounding of Indigo and Goair aircraft.