New Delhi: The Securities and Exchange Board of India (Sebi) has given its go-ahead for the open offer for Fortis Healthcare Ltd, which will allow Malaysia’s IHH Healthcare Berhad take a controlling stake in India’s second-largest hospital chain.

The market regulator’s nod would let IHH Healthcare launch an open offer for shareholders of Fortis, asking them to tender their shares at 170 apiece. Sebi approved the proposal for the open offer worth 3350 crore on Friday, according to its website.

IHH Healthcare’s managing director (MD) and chief executive (CEO) Tan See Leng had said earlier that the company is hopeful of completing the open offer to acquire an additional 26% stake in Fortis by the end of December. “Our most optimistic target is that by middle of December, we will put up the offer and we are cautiously optimistic that by end of December we can complete it," he said.

Fortis Healthcare in November issued 235.3 million equity shares through preferential allotment to IHH Healthcare for about 4,000 crore. It allowed the Malaysian company take a 31.1% stake in Fortis Healthcare. “The acquisition of a controlling stake in Fortis Healthcare, one of the leading healthcare service providers in India, represents a transformational investment for IHH and demonstrates our commitment to invest considerable resources to expand and consolidate our footprint in India," Tan See Leng had said. Tan and three other officials from IHH Healthcare were appointed to the board of Fortis Healthcare post the acquisition.

After infusing 4,000 crore in its newly acquired cash-strapped hospital chain in November, IHH Healthcare said that it would review the projects and capital expenditure of Fortis Healthcare.

“While we had set aside 4,000 crore, we are fully cognizant of the fact that we will need more money to really look at reviewing at capex and looking at some of these greenfield investments in terms of expansion and also bringing up new hospital sites," Tan had said.

The company also said that it currently has no immediate specific plans to change the brand name of Fortis Healthcare though it has several brands that could be considered if a decision is taken regarding this in future.

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