KUALA LUMPUR (Oct 9): IHH Healthcare Bhd (KL:IHH) on Thursday said it is maintaining the offer price for its proposed acquisition of a 26% stake each in Fortis Healthcare Ltd and Fortis Malar Hospitals Ltd, despite a sharp rally in the shares of the two Indian hospital operators.
The private healthcare group said the decision follows the approval from India’s Securities and Exchange Board last week that paves the way for IHH to proceed with the long-delayed mandatory open offers.
In a filing with Bursa Malaysia, IHH said the Fortis offer is priced at 170 Indian rupees (RM8.07) per share, plus accrued interest of 53.80 rupees (RM2.55) per share for eligible shareholders.
For Malar, the offer price is 17.6 rupees (84 sen) per share, together with interest of 18.36 rupees (87 sen) per share. The Malar offer was last revised in August 2024 to 17.6 Indian rupees from 20.1 Indian rupees, following dividend payouts.
The open offers for both companies are slated for completion in the fourth quarter of this year and are not expected to materially impact IHH Group’s earnings for the financial year ending Dec 31, 2025, the group said.
Shares of both companies have surged since the Covid-19 pandemic. Fortis is up more than eightfold to 1,067.60 rupees on Thursday, compared to a low of 125.60 rupees in October 2020. Malar, meanwhile, is trading at 68.42 rupees, up from around 40 rupees five years ago.
The mandatory offer of up to 197.03 million Fortis shares from existing shareholders was first announced in July 2018, after IHH stepped in as a white knight with a RM2.4 billion subscription of new shares for a 31.1% stake. Fortis in turn holds a 62.4% stake in Malar, which operates a healthcare business in Chennai.
The deal had been stalled since 2018 by litigation due to a dispute between Fortis’ founders Malvinder and Shivinder Singh, and Japan’s Daiichi Sankyo Co Ltd, over the Japanese pharmaceutical group's acquisition of drugmaker Ranbaxy Laboratories Ltd from the Singh brothers more than a decade ago.
In May this year, IHH through its subsidiary raised the damages sought against Daiichi Sankyo by tenfold to over ¥200 billion (RM5.71 billion) for blocking its attempt to make an open offer for Fortis and Malar shares.
Shares of IHH, which has risen 11% year to date, closed unchanged at RM8.10 on Thursday. This values the group at RM71.57 billion.