IHH commits to Fortis open offer after Indian Supreme Court lifts stay

27 May 2019 (Last Updated May 29th, 2019 15:02)

Malaysia-based IHH Healthcare has stated that it is committed to proceeding with the open offer for Fortis Healthcare after the stay by the Indian Supreme Court in a contempt case by Daiichi Sankyo.

Malaysia-based IHH Healthcare has stated that it is committed to proceeding with the open offer for Fortis Healthcare after the stay by the Indian Supreme Court in a contempt case by Daiichi Sankyo.

IHH announced this to allay the concerns of a few of the minority shareholders of Fortis Healthcare who appealed to Securities and Exchange Board of India (SEBI) to direct IHH Healthcare to pay them interest for the delay in the open offer to purchase an additional 26% stake in Fortis.

An IHH spokesperson was quoted by PTI as saying: “IHH understands the concerns of the Fortis Healthcare minority shareholders regarding the delay in the open offer.” The Supreme Court of India imposed a stay on the open offer following a contempt case filed by Daiichi Sankyo. IHH and Fortis were, however, not party to the initial proceedings. Fortis later became part of the proceedings to urge the Supreme Court to lift the stay which will help the open offer to proceed.

IHH stated: ”IHH would like to reiterate that we are committed to proceeding with the open offer once the stay is lifted by the Supreme Court. Our commitment is demonstrated through us depositing INR34bn [$489m] in a non-interest bearing escrow account for the open offer,” it added.

Currently, the case is at the judgment delivery stage, it added.

Japan-based Daiichi Sankyo filed a contempt plea against Fortis Healthcare founders Malvinder Singh and Shivinder Singh for creating encumbrances on 1.2 million Fortis Healthcare shares, thereby violating the court orders.

Through its wholly owned subsidiary Northern TK Venture, IHH was to purchase more than 197 million shares through the open offer at Rs.170 per share.

To increase its holding from the current 31% to 57.10%, the Malaysian company intended to invest up to Rs33bn ($446.7m).

This open offer was slated to begin on 18 December and end on 1 January.