IHH shut out of India's Fortis takeover deal

KUALA LUMPUR: IHH Healthcare has been shut of out the proposed takeover of India's Fortis Healthcare Ltd.

IHH said on Monday that the board of Fortis had indicated its inability to engage with IHH as Fortis has entered into binding agreements with Manipal Health Enterprises Private Ltd, Manipal Global Health Services and TPG Asia.

IHH was responding to a StarBizWeek article “IHH in battle for Fortis again” which was published on Saturday.

IHH confirmed that it had on April 11, 2018 issued a strictly non-binding letter to the board of Fortis expressing its interest to participate in Fortis and its affiliates in a suitable manner. 

However, it was informed by Fortis that the latter had already entered into agreements with the other two parties.

“At this juncture, IHH has not entered into any discussions, negotiations or transactions,” said IHH.

In the non-binding expression of interest, IHH managing director and group CEO Dr Tan See Leng said that the price of up to 160 rupees per Fortis share was appropriate, subject to satisfactory completion of a limited due diligence.

“Our request for such due diligence primarily stems from the inability of the statutory auditoirs of the company to opine on its financial position as at Dec 31, 2017 and regulatory invetigations are underway.

“We note that the company (Fortis) has recently entered into an implementation agreement with Manipal Health Enterprises Private Ltd and TPG Capital for a transaction that involves various complex steps over a prolonged period.

 "We believe that we could provide an alternative transaction construct, which in our view, would offer a better option to the company’s shareholders at an attractive valuation.”

Dr Tan said IHH is the world's second largest provider of integrated healthcare services by market capitalisation (US$13bil as of date) and the largest private healthcare provider in Asia. After Malaysia, Singapore and Turkey, India is its fourth home market.

The letter had also raised seven points about the current situation of Fortis including on-going investigations by the regulatory authorities in India, tightened credit lines and its inability to access funds in the equity capital market.

IHH's value proposition, he said, was that it could be a visionary strategic partner with significant operation expertise and sufficient balance sheet strength, to navigate troubled waters and steer the company in the the right direction.


Corporate News , M&A