Cash-strapped Fortis said IHH will invest 40 billion Indian rupees ($584.11 million) at 170 rupees per share.
KUALA LUMPUR: Shares of IHH Healtcare and Fortis Healthcare fell on Friday after India's Supreme Court put the sale of the Indian company on hold.
IHH acquired a 31.1% stake for RM2.348bil in cash-strapped Fortis, which operates about 30 private hospitals in India, in July after an extended bidding war for control of the company.
IHH closed 20 sen down to RM5.40 and erased 3.11 points from the KLCI. Fortis fell to a low of 130.28 rupees. At 6.15pm, Malaysia time, Fortis was down 10.50 rupees to 141.10 rupees
IHH had subscribed to 235.294 million new Fortis shares at 170 rupees each or RM9.98 per share. This valued Fortis at approximately RM5.214bil.
Bloomberg reported the Supreme Court ruling came in a case filed by Daiichi Sankyo Co Ltd. as part of its effort to recover US$500mil from Fortis’ founders and ex-owners Malvinder and Shivinder Singh.
The Singh brothers were found to have concealed information in their 2008 sale of Ranbaxy Laboratories Ltd. to the Japanese drugmaker.
The wire reports the court order threatens to delay, or potentially even scuttle, Fortis’ takeover by the Malaysian hospital chain, a decision that came in July after a messy takeover battle.
To recap, Fortis was left cash-strapped after its founders were alleged to have routed money illegally from the company and was depending on IHH’s support, according to Bloomberg.
The order comes just as IHH was going to make an open offer to boost its shareholding in Fortis, where it invested 40 billion rupees (US$558mil) earlier this year. It already holds about 31.1%.
Daiichi sought a stay on the sale of Fortis in November, alleging the Singh brothers had pledged Fortis shares in violation of court orders.
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