The Competition Commission of India (CCI) has given its approval to IHH Healthcare’s acquisition of a controlling stake in Fortis HealthcareNSE 1.94 %, the second largest hospital chain in the country, two people familiar with the development said. An announcement to this effect is expected shortly.
Under the deal, the Malaysian company will pick a 31% stake at Rs 170 per share aggregating Rs 4,000 crore. The investment will be made through a fresh issue of shares by Fortis Healthcare to IHH. In addition, it has given a refinance facility of Rs 2,500 crore. The proceeds will be used to delist the business trust, Religare Healthcare Trust, listed in Singapore and buy out minority shareholders of pathology lab chain SRL.
“We understand that the Competition Commission of India has approved the proposed Fortis-IHH transaction. We remain committed to work towards the seamless closure of the transaction,” a Fortis Healthcare official said in a statement.
After this, IHH will make an open offer to buy a 26% stake from the market at Rs 170 per share as stipulated under the takeover code. Depending upon the response from the open offer, IHH will own up to a 57% stake. “Given today’s price of Rs 133.90 per share on the Bombay Stock Exchange, it is expected that the open offer at Rs 170 per share, a premium of 27%, will be fully subscribed,” said a banker associated with the transaction.
