Mumbai: Fortis Healthcare Ltd has struck a broad agreement to buy up to 74% of unlisted Wockhardt Hospitals for about Rs7.5 billion, a newspaper reported on Tuesday, citing unnamed sources.
If the deal materialises, Fortis is likely to invest Rs4 billion in the first phase for a 40% equity stake and will raise it subsequently, the Economic Times said citing unidentified investment bankers.
However, a formal deal is yet to be sealed, with both companies in the process of ironing out differences, including the issue of branding the hospital chain, the report added.
The report said a Wockhardt spokesman has declined comment while a Fortis spokesperson said, “We are in the market. We cannot comment on market speculation or any individual deals.”
Private equity firms General Atlantic and Advent were also in the race, but Fortis was close to clinching the deal, the report added.
Fortis’ valuation of Wockhardt Hospitals, at over Rs10 billion rupees, was substantially lower than that arrived at during the latter’s aborted initial public offer last February, the report said.
Wockhardt Hospitals, founded by the promoters of drug maker Wockhardt Ltd, had sought to divest 24% stake to raise roughly Rs8 billion through the public offer, but withdrew it on lack of demand.