Malaysia healthcare group IHH Healthcare Bhd plans to make an open offer to buy shares in India’s Fortis Healthcare Ltd
According to a report in The Economic Times, IHH is readying $1 billion (approximately Rs6,499 crore) for deal.
It has hired investment bank Citi to advise on the deal.
Fortis the second-largest hospital chain in India with over 5,000 beds, after Apollo Hospitals’ over 10,000 beds, has specialist hospitals in Delhi, Amritsar, Kolkata, Navi Mumbai, Mohali, Ludhiana, Jaipur, Chennai, Kota, Bengaluru, Gurgaon, Noida, Faridabad, Mumbai, and Odisha.
IHH, the world’s second largest healthcare group, operates the Parkway Pantai chain of hospitals, is keen to expand into in a bid to expand into emerging markets where a growing middle class is boosting demand for private hospitals.
So far, IHH has 50 hospitals in 10 countries and earns its highest per-capita revenue in Singapore, where inpatients bring in an average of $6,400 per admission.
According to the ET report, IHH will launch a voluntary open offer to buy the non-promoter shares of Fortis in the next few days, nine months after walking out of bilateral negotiations with promoters Malvinder and Shivinder Singh who were then in control of Fortis.
The report said IHH’s bid is likely to set the stage for competition with the TPG-Manipal Hospitals for a majority stake in Fortis. TPG, which has more than $73 billion in assets under management, acquired about 25 per cent in Manipal Health Enterprises Pvt Ltd, one of India’s largest private hospital groups, in 2015.
Last June, IHH pulled out of exclusive negotiations on Fortis just days before signing on the dotted line, over concerns on the legal implications of a legal battle between Daiichi Sabkyo and the Singh brothers.
Parkway Pantai has a strong presence in India, which is its fourth largest market after Malaysia, Singapore and Turkey. It entered the country in 2015, buying a 51-per cent stake in Hyderabad-based Continental Hospitals and 74-per cent in Global Hospitals, also based in Hyderabad.