| Fortis Healthcare in The News |
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Fortis Healthcare moves South; buys Malar Hospital |
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RANBAXY promoter group company, Fortis Healthcare, is making its entry into south India by taking over Chennai-based Malar Hospital. The acquisition will be carried out through its wholly-owned subsidiary International Hospital (IHL) in association with Ranbaxy group company Oscar Investments.
Fortis Healthcare is paying Rs. 11.76 crore for buying 28% stake from the promoters of the 180-bed multi-speciality hospital valuing the company at Rs 42 crore. Fortis Healthcare and Oscar Investments will acquire another 18% (of the expanded equity capital) by subscribing to a preferential allotment issue at Rs. 30 per share totaling Rs 14 crore.
VALUE BUY
Fortis Healthcare is paying Rs 11.76 crore for a 28% stake from the promoters of the180-bed Chennai hospital, valuing the co at Rs 42 crore. |
Oscar Investments share of this 18% will be around 7%. On an expanded equity capital, Fortis Healthcare and Oscar will together own 46%. Fortis Healthcare will also make an open offer for purchasing an additional 20% equity from Malar’s existing shareholders.
Fortis Healthcare CEO and MD Shivinder Singh said: “Malar Hospital has a strong brand equity in Chennai and South India and is located at a strategic location. The acquisition marks the beginning of the company’s foray in south India.” Malar Hospital will be Fortis’ 13th hospital and the first in south India.
Fortis Healthcare shares at the Bombay Stock exchange (BSE) closed at Rs 85.25, down 0.58% from Thursday’s close. However, Malar Hospital’s share at BSE rose to an year high of Rs 38.25 before closing at Rs 36.00, up 12.85% from Thursday’s close.
Fortis Healthcare would fund the acquisition through borrowings and internal accruals. Malar hospital has an accumulated loss of around Rs 20 crore and significant debts in the market. Malar hospital’s whole-time director Dr Nithya Ramamurthy’s personal loans are said to be in the region of Rs 24 crore. The hospital has been up for sale for sometime and hospitals such as Manipal Hospital and Apollo Group had also evinced interest to acquire Malar. |
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