Allaying the fears of its minority shareholders, Malaysia’s IHH Healthcare Berhad on Friday said it is committed to proceeding with the open offer once the Supreme Court stay is lifted.
“IHH understands the concerns of the Fortis Healthcare minority shareholders regarding the delay in the open offer," an IHH spokesperson said in a statement, a day after Mint reported that some minority shareholders of Fortis had appealed to the Securities and Exchange Board of India (Sebi) to issue directions to IHH Healthcare to pay interest to shareholders for the delay in the open offer to buy an additional 26% stake in Fortis Healthcare.
It said the delay is due to the stay imposed on the open offer by the Supreme Court in the contempt case filed by Daiichi Sankyo, and once it is lifted it would proceed with the open offer.
While the shareholders have blamed IHH Healthcare for not taking the initiative to resume the open offer, IHH said that neither Fortis nor IHH were parties to the original proceedings. It added that Fortis has since joined the proceedings to persuade the Supreme Court to lift the stay so that, among other things, it can proceed with the open offer.
“IHH continues to work with Fortis on the matter and is in full support of Fortis’s representations to the Supreme Court, pleading it to lift the stay. The case is now at the judgement delivery stage. IHH has full faith and confidence in the Indian judicial system and hopes for a speedy resolution to the matter," the statement added.
The offer was to be open for subscription from 18 December to 1 January. “The case and the resultant delay in the open offer are taking up Fortis’s management bandwidth. At the same time, the minority shareholders are unable to exercise their exit opportunity," the statement said.
In July 2018, IHH Healthcare had won a multi-pronged bidding war to acquire Fortis and completed the deal in November, buying a 31.1% stake through preferential allotment of shares.
To stabilize business, IHH Healthcare immediately infused ₹4,000 crore, but an additional ₹3,400 crore put in an escrow account to initiate an open offer is stuck.
The Supreme Court had in December put on hold the Fortis-IHH deal, ordering a status quo with regard to the sale, following a contempt plea by Japanese drug maker Daiichi Sankyo Co. Ltd against the Singh brothers, the former promoters of Fortis.
“IHH would like to reiterate that we are committed to proceeding with the open offer once the stay is lifted by the Supreme Court. Our commitment is demonstrated through us depositing ₹3,400 crore in a non-interest bearing escrow account for the open offer," it added.