Clearing the air. IHH ready to proceed with Open Offer for Fortis when SEBI gives go-ahead

Malaysia’s IHH Healthcare has sought to clear the air of uncertainty over its acquisition of Fortis Healthcare by reaffirming its commitment to the Indian healthcare sector and to growing Fortis, where it is the largest shareholder with a 31.17 per cent stake.

“We certainly understand the frustration Fortis investors have felt over the past four years around the uncertainty of the IHH open offer. With the recent Supreme Court judgement ruling making clear that we have conducted our investment into Fortis in a fair and transparent manner, we are discussing with SEBI to move ahead with the offer. Should they concur and approve, IHH is ready to proceed with the open offer as soon as possible,” said Dr Kelvin Loh, Managing Director and CEO of IHH Healthcare, in a statement to the Malaysian and Singapore stock exchanges.

IHH pointed out, that following the recent Supreme Court judgement, the SLP, the Original Contempt Petition and the Suo Moto Contempt Petition are disposed of. The SC “has not found nor indicated any wrongdoing by IHH in terms of our investment into Fortis in its final written judgment dated 22 September 2022. There is also currently no court order pending against IHH in these proceedings,” the statement said.

Next steps

Accordingly, IHH is in discussion with the Securities and Exchange Board of India (SEBI) to determine the next steps pertaining to the Mandatory Tender Offer in Fortis, in full compliance with all requisite regulations, it said.

“Should IHH receive approval from SEBI, it will be ready to undertake the Offer in a timely manner,” it added. In November 2018, IHH acquired through a preferential allotment, a 31.17 per cent stake in Fortis by infusing fresh capital of ₹4,000 crores into Fortis. “At that time, Fortis was in operational and financial distress, thus the capital was much needed. With the subsequent disciplined execution of a 100-day turnaround plan, as well as active engagement with the Fortis Board and management since, IHH has enabled the turnaround of Fortis, which now contributes positively to IHH Group results,” it said.

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