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Fortis hospital chain to be rebranded as Gleneagles in future following IHH Healthcare takeover

Not only must Fortis’s new owner turn around three straight quarters of losses, it must also deal with the fallout left by the Singh brothers.

business Updated: Jul 14, 2018 14:50 IST
Fortis hospital chain,Gleneagles,IHH Healthcare
A bidding war for cash-strapped Fortis kicked off earlier this year after its founders, brothers Malvinder and Shivinder Singh, lost their shareholding due to debt, and allegations that the Singhs had improperly taken funds from the company.(Reuters File Photo)

Fortis Healthcare board on Friday approved Rs 4,000-crore offer from Malaysia’s IHH Healthcare for 31.1% stake in it, valuing the cash-strapped firm at Rs 8,880 crore thus ending months of takeover battle.

IHH Healthcare, which is expected to gain majority control of India’s second-largest hospital chain after a mandatory open offer for an additional 26% stake, said in the long term it would rebrand Fortis hospitals into its own Gleneagles chain.

The Malaysian healthcare major which offered to infuse the capital at Rs 170 per share pipped rival Manipal-TPG combine’s Rs 2,100-crore offer at Rs 160 per share.

When asked about using the Fortis brand, which is currently under litigation, IHH managing director and CEO Tan See Leng said, “We will respect all the licences and agreements that Fortis currently has for the brands but in the long term and going ahead we would like to rebrand the Fortis hospitals to our own brand, Gleneagles.”

Based on the offer price of Rs 170 per share, the implied equity valuation for 100% of Fortis Healthcare is Rs 8,880 crore.

The fund infusion from IHH will address Fortis’ liquidity requirements, including funding for RHT acquisition and for providing exit to private equity investors of diagnostics arm SRL.

IHH Healthcare Berhad currently operates over 10,000 beds across 49 hospitals in nine countries worldwide.

Fortis on the other hand has 45 healthcare facilities, including projects under development, in India, Dubai, Mauritius and Sri Lanka with approximately 10,000 potential beds and over 368 diagnostics centres.

First Published: Jul 14, 2018 13:51 IST