NEW DELHI: Manipal Health Enterprises has launched an open offer for 26% of Fortis Malar Hospitals’ shares at a price of Rs 64.45 per share, which makes the total consideration payable Rs31.54 crore, according to a filing on the Bombay Stock Exchange. The offer, managed by Kotak Investment Banking, represents a premium of 10.9% over the closing price of Fortis Malar’s shares on Wednesday.
The open offer has been triggered following an announcement that Fortis Healthcare Ltd would be demerging its hospital business and merging it with Manipal in a Rs3,900 crore deal backed by Manipal promoter Ranjan Pai and Private Equity firm TPG.
Considering that Fortis Malar, a listed firm, is a step down subsidiary of Fortis Healthcare, the deal would also mean that control of the entity would change hands as a result.
“FHL (Fortis Healthcare Ltd), indirectly, through FHsL (a wholly owned subsidiary of FHL), is the parent company of the Target Company (Fortis Malar) and indirectly owns 1,17,52,402 equity shares representing 62.43% of the voting share capital,” stated the open offer document dated March 28.
According to the offer, Manipal Health Enterprises Pvt Ltd will become the new parent of Fortis Malar Ltd following the transaction and shall have indirectly acquired equity shares representing 62.43% of the voting share capital in it, gaining control over the company.
As per the deal approved by the Fortis board late on Tuesday, Fortis Healthcare will also sell a majority stake in its SRL Diagnostics unit to Manipal.
The transaction will lead to the listing of Manipal Hospitals and is expected to make it the largest hospital services provider in the country by revenue.
Pai would become the largest investor with a 37.9% stake in post-merger Manipal Hospitals and TPG would hold 20%. He is the principal shareholder in Manipal Hospitals while TPG is an investor in the company.
While share prices of Fortis Healthcare Ltd plummeted over 13% upon the announcement, share prices of Fortis Malar Hospitals Ltd dropped 5.30% to Rs 58.10 apiece on BSE on Wednesday.