Fortis Healthcare accepted Malaysia-based IHH Healthcare Berhad's bid because of the simplicity of its proposal, said Bhavdeep Singh, CEO of the company, adding that the price per share offered by IHH was better than the other bidders.
After a lot of uncertainty and speculations, the board of the cash-strapped firm accepted Rs 4,000 crore bid from IHH which outbid rival bidder TPG-Manipal in the race.
The world’s second largest healthcare group by market capitalisation, will acquire a stake of between 31.1% to 57.1% of Fortis, through a preferential allotment of shares (31.1% stake), and a mandatory open offer (up to another 26% stake), it said in a statement on Friday.
In an exclusive interview with CNBC-TV18, Fortis chairman Ravi Rajgopal said that both IHH and Manipal could have been attractive partners to Fortis, however, he added that the company looked at the financial attractiveness and simplicity while evaluating the offers and selected the former as it looked more compelling than others. “Strategically IHH looks better placed than other bidders,” he said.
He further mentioned that IHH was better placed in the Indian market as it had already run a few hospitals in the country.
CEO Singh said that the company was looking forward to working with IHH and receiving shareholders' nod for the deal. "We should receive shareholders' approval by next week." However, chairman Rajagopal said that it was premature to conclude if shareholders would be happy with the deal.
"We see a major synergy between the company and IHH ... will look to leverage IHH's expertise to grow Fortis brand," said Singh.
He admitted that the last 12 months have been challenging for the company on multiple fronts and added that the company will have to deal with the legacy issues to get the IHH deal go through.
Talking about the management structure, Rajagopal said that IHH will get priority seats on the company's board. However, he added that the management structure will not change significantly.
First Published: IST