CCI may give nod to Fortis–IHH deal by October-end

Competition Commission of India (CCI) is likely to give its approval to the Fortis–IHH deal by the end of October, bringing the curtains down on the bidding war for Fortis that started in February this year after founders Malvinder and Shivinder Singh lost shareholding because of debt. The Fortis Healthcare board had in July unanimously accepted the binding offer from IHH Healthcare Berhad to invest `4000 crore in the cash-strapped hospital chain, outbidding a consortium of Manipal Health Enterprises and TPG Capital, and ending the search for an investor. Law firm Khaitan and Co., which is a legal advisor to Malaysia’s IHH Bhd, has been following up with CCI and IHH and is likely to get an approval by October.

Following the CCI approval, IHH could pick up a controlling stake in India’s second-largest hospital chain by infusing around `4000 crore for equity shares at `170 apiece and subsequently initiate an open offer for additional stake. The approval from CCI is critical at this point to ensure that there is no impairment of assets in the ecosystem in terms of making payments to vendors on time, dispersing salaries to doctors, and maintenance of equipment.