Fortis Healthcare is top gainer

Fortis Healthcare is the top gainer on the BSE, up over 5% at Rs.149.40.

The stock rose as finally there seems to be a closure to the takeover saga. The Board, unanimously approved a binding investment proposal from IHH Healthcare.

Under the proposal, IHH will invest Rs 4,000 crore by way of preferential allotment.

This preferential allotment is at a price of Rs.170/share, which, at the current price is at a premium of 14%.

As IHH’s acquisition exceeds 25%, IHH will have to make an open offer of up to Rs.3300 crore to acquire additional 26%. This will also be at a price of not less than Rs.170/share.

IHH’s proposal provides for refinance of debt to the extent of Rs 2,500 crore and will be used towards completion of acquisition of assets of RHT, SRL private equity minority shareholders and short term liquidity needs. 

The transaction is expected to be completed within 7 business days after the shareholders and the Competition Commission of India approve it. 

IHH’s bid is much higher than that of Manipal -TPG consortium had offered to infuse Rs 2,100 crore by buying shares through a preferential allotment at Rs 160 per share.

The good news - Fortis Healthcare will remain listed after IHH transaction – the IHH CEO Tan See Leng said in a conference call.