Leading healthcare group, IHH Healthcare Berhad, has recently inked an exclusivity agreement in a bid to acquire a controlling stake in Fortis Healthcare as well as its diagnostics subsidiary-SRL Diagnostics. SRL is being spun off from Fortis into its existing listed subsidiary Fortis Malar.
According to reliable sources in IHH, “We have signed an exclusivity with Fortis Healthcare till the month of June. If all goes well, we would ink the final deal in the next three months.” IHH is looking at Rs 200 per share, said sources. The share of Fortis Healthcare, which operates over 4,500 beds in 16 locations, closed at Rs193.50 on BSE on Friday. IHH, which has hospitals in Hyderabad, Bengaluru, Chennai and Mumbai, has recently exited its decade-long association with Apollo Hospitals and is keen to consolidate its presence in India.
Similar to its other deals in India, IHH is looking at acquiring majority stake in Fortis with promoters Malvinder Mohan Singh and Shivinder Mohan Singh currently holding 52.3% stake in the company. Others who evinced interest in acquiring stake in Fortis Healthcare include PE firms- TPG Capital, KKR and Bain Capital.
While media report states that TPG Capital is out of the race, it is not so as per market sources. “TPG had reservations about the deal due to the valuation, company structure and litigation (the Daiichi Sankyo’s move to block Fortis sale). But TPG has not dropped out the deal. It might re-look at the deal at a later stage,” said market sources. TPG Capital had joined forces with General Atlantic to bid for 26% stake in Fortis Healthcare as well as SRL Diagnostics. TPG Capital had also signed an exclusivity agreement with Fortis that was valid for the month of November and December, said sources.