As minority shareholders slammed sale of its hospital business to Manipal Hospitals, Fortis Healthcare shares tumbled 13.3% on Wednesday.
It may be noted that day earlier on Tuesday the Fortis board okayed the demerger of its hospitals business to Manipal and TPG Capital, along with 50% in diagnostics chain SRL.
These shareholders are not happy with the deal undervaluing the worth of the hospital business significantly. They are also aggrieved, complaining that the valuation of Manipal is not transparent.
On Tuesday, reacting to the development Bhavdeep Singh, Fortis Healthcare CEO said, as an organisation we are thrilled with this transaction as it enables us to take the next bold step into our future.
“Much has transpired over the past 12-18 months at Fortis and in the healthcare industry at large; its now time to get back to working with our doctors and nurses to saving and enriching lives.
We believe Manipal has built a terrific franchise and team and the coming together of our two organisations will be transformational for the healthcare industry, Singh said.
Dr Ranjan Pai, Chairman of Manipal said the companies make a compelling strategic fit in terms of complementary geographies, clinical strengths as well as a shared commitment to providing outstanding patient care.
As the largest hospital operator in India, this will be a platform benefiting all, from the communities we serve, to our capable employees and our investors. We have an excellent opportunity to leverage this strength to expand coverage and service delivery, in response to the burgeoning demand for world class healthcare,” Pai added.
Meanwhile it is learn that Dr Ranjan Pai and TPG will invest INR 3,900 crore in Manipal Hospitals as part of the proposed transaction.
The funds will be utilised by Manipal Hospitals to finance acquisition of 50.9 percent stake in SRL.
Moreover, the investment will support the proposed acquisition of hospital assets owned by RHT Health Trust (RHT) and the growth of the hospitals and the diagnostics businesses.
Manipal Hospitals, part of Manipal Education and Medical Group, promoted by Ranjan Pai and has been backed by US-based PE firm TPG.