IHH Healthcare says still in race for Fortis, to reach out to shareholders directly

Fortis Healthcare  | In the September quarter, Rakesh Junjhunwala held a 2.65 percent holding in the stock, and FIIs have increased its stake to 41.04 percent from 40.98 percent in the June quarter. In FY21 so far the stock price has risen 0 percent to Rs 125.70 as on October 26.

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26 Aug, 2025 12:21

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IHH Healthcare on Friday said it is still in race to buy Fortis Healthcare and is currently evaluating its options, including reaching out directly to shareholders with a possible hostile bid.

The majority members of the Fortis board on Thursday decided to recommend the Munjal-Burman offer for shareholders approval.

“We are disappointed by the decision made by the Board of Fortis, as we believe we submitted the most compelling bid for the benefit of all Fortis stakeholders. Our bid, which offers the highest price and most comprehensive solution, addresses the short term liquidity requirements and long term strategic objectives of the company,” said Tan See Leng, Managing Director and Chief Executive Officer of IHH Healthcare.

“We remain committed and are currently evaluating our options. We are open to further discussions with all stakeholders, and look forward to the support of Fortis shareholders,” Leng said.

Also Read: Exclusive | Manipal's Ranjan Pai "very disappointed" with Fortis board's decision to back Munjal-Burman's bid

Hostile takeovers involve the interested party reaching out to shareholders directly with an offer to purchase shares at a substantial premium compared to the bid favoured by the board.

IHH has reasons to be baffled by Fortis board’s decision. The Malaysian healthcare provider, backed by the South-East Asian country’s sovereign fund Khazanah, had emerged as the highest bidder for Fortis by making an offer to invest Rs 4000 crore valuing the company at Rs 175 per share. Out of Rs 4000 crore – it has proposed to invest Rs 650 crore upfront without due diligence.

On the contrary, Munjal-Burman jointly offered to invest Rs 1,800 crore in Fortis Healthcare at weighted average valuation of Rs 175 per share - through a combination of preferential equity and warrants allotment.

“With our strong execution track record and decades of global healthcare experience, IHH is best poised to provide the requisite vision, leadership, and financial strength to grow Fortis into a leading healthcare player,” Leng added.

Manipal-TPG too expressed its unhappiness over the Fortis Board's decision.

A divided board

Out of eight directors on the Fortis board – five directors voted for Munjal-Burmans, sealing the deal in favour of them.

Sources told Moneycontrol that the three members on the Board who voted against the Munjal-Burman offer were the directors appointed on recommendation of minority shareholder East Bridge Capital and Jupiter India.

Now, the Munjal-Burman offer will have to get Fortis shareholders nod.

Fortis said the shareholder meeting is expected in the next 30-45 days.

Earlier, Brian Tempest, director on Fortis board, defended the decision to back the Munjal-Burman bid, saying that the offer will address the immediate liquidity concerns of the company.

On a possible hostile bid Tempest said “who can tell what's going to happen in the future.”