Minority shareholders of Fortis Healthcare Ltd are demanding that the company and its parent IHH Healthcare Bhd make efforts to vacate a Supreme Court stay on an open offer for buying additional shares of the Indian hospital operator, according to three people familiar with the development.
There are some minority investors who have asked the company about its action plan on the ₹3,400 crore offer, especially considering that Chief Justice of India Ranjan Gogoi retires on 17 November.
“The open offer has been stuck in Supreme Court for nearly a year. We had written a letter to Fortis and Sebi (Securities and Exchange Board of India) in August. With the Supreme Court Chief Justice retiring this month, we are now hoping to get it done before that,” one of the minority investors said on condition of anonymity.
In December last year, a three-judge bench headed by Chief Justice Gogoi had ordered a status quo on the sale of Fortis Healthcare to IHH Healthcare while hearing a petition by Japanese drugmaker Daiichi Sankyo. Another bench, which was also headed by Chief Justice Gogoi, reserved order on the stay in April.
Fortis Healthcare, in its response to Mint, said that the company has undertaken its best efforts on the matter, including making requisite interventions before the court, as soon as the stay order was passed.
“Fortis has made extensive arguments before the Supreme Court of India, highlighting the impact of the stay order on the public shareholders of the company, as well as on Fortis Healthcare Ltd itself,” the company said in a statement.
The company is hopeful of a positive outcome on or before 17 November, it said.
Some shareholders of Fortis Healthcare also approached Sebi in May and asked the regulator to issue directions to Malaysia’s IHH Healthcare to pay interest to shareholders for the delay in the open offer to buy an additional 26% stake in Fortis Healthcare. “We are seeking an 8-10% interest from IHH due to the delay in the offer,” another minority investor said on condition of anonymity.
After a long bidding war, a binding offer by IHH Healthcare to invest ₹4,000 crore in Fortis Healthcare was unanimously accepted by the company’s board in July last year. Fortis Healthcare was then severely cash-strapped, and IHH Healthcare clinched the deal by outbidding a consortium of Manipal Health Enterprises and TPG Capital.
IHH Healthcare’s acquisition of 31% stake in Fortis Healthcare triggered a mandatory open offer for an additional 26% stake worth ₹3,400 crore in the Indian company under Sebi regulations. The open offer price was set at ₹170 per share. However, soon after, Daiichi Sankyo approached the apex court seeking a stay on the open offer in a plea related to recovery of an arbitration amount from its former promoters.
IHH has deposited the funds for the open offer in a non-interest bearing escrow account, and are being maintained without demur for the entire period of operation of the stay order, Fortis Healthcare said.
Source: Mint