Fortis, RHT Tweak Terms Of Acquisition
Fortis Healthcare Ltd., which has picked Malaysia’s IHH Healthcare BHD as its new owner, will take longer than originally planned to complete its acquisition of Singapore-listed RHT Health Trust.
The Indian hospital operator and RHT today amended the prior definitive agreement which the two had signed on Feb. 12, according to a media statement by Fortis.
The principal amendments include:
- Changing the long-stop date for fulfilling the precedent conditions to Dec. 31, 2018 from Sept. 30, 2018 earlier. Fortis is in process for raising funds through a primary infusion that will enable it to acquire RHT assets. The fund-raise is under way and awaiting regulatory approval, the release said.
- The consideration Fortis pays for RHT shall be computed based on the rupee-Singapore dollar exchange rate on Bloomberg L.P. one business day prior to the deal completion date. However, the reference rate on Sept. 30 will be used if the closing offer rate in December is lower.
- Fortis will also compensate RHT for all legal, financial, advisory and accountancy costs that it incurs due to the extension.
In February, Fortis had agreed to acquire RHT's entire portfolio of assets for an enterprise value of Rs 4,650 crore. These include 12 clinical establishments, four greenfield establishments and two operating hospitals. Shareholders of the hospital operator had given its nod to the acquisition in an overwhelming majority in May.
“Fortis believes that the proposed transaction will potentially enhance value for all its stakeholders,” the media release said. “With the unwinding of the current structure, it would also make it easier for investors and other stakeholders to better understand the company's business and financial performance.”
Fortis itself has had a turbulent year facing financial and regulatory troubles that triggered a months-long takeover battle after founders—Malvinder Singh and Shivinder Singh—lost control. In July, Malaysia's IHH Healthcare BHD agreed to take control of the firm along with a fund infusion of Rs 4,000 crore.
The stock closed 0.87 percent higher, ahead of the announcement, in contrast to a 0.22 percent fall in the benchmark S&P BSE Sensex.