Fortis Healthcare in talks with PE firms for offloading 15-20% stake

29 Mar 2012 Evaluate

Fortis Healthcare India, which runs the country’s second largest hospital chain, is in talks with private equity firms Carlyle Group and TPG Capital India to sell a 15-20% holding of the company. The company aims to raise around $250 million through a combination of equity and convertible debt instruments from the PE firms, in a deal which is expected to be concluded over next two weeks.

The company is mulling to execute a two-stage deal-wherein, the promoters will first divest about 6.5% stake through the stock auction route, which will be later followed by the private placement of 15-20% stake to PE firms at a negotiated price.

The move of selling stake through a stock auction would help will help the billionaire Singh brothers, in reducing their stake in the company to levels prescribed by the stock market regulator for listed firms, and also provide Fortis with money to suspend some of its debt. The price at which Fortis Healthcare will divest its stake to PE firms is expected to be in range from Rs 110 to Rs 120, a share, at a premium to the current price of Rs 100.05 (Close price as on March 28, 2012).

Fortis Healthcare (FHL) has alliance with international partners such as Aetna, Bupa, Cigna, GMC Services, HTH Worldwide, Vanbreda and World Access. These alliance helps the company provide quality, cost effective healthcare, medical expertise, and related health services.

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Company Name CMP
Apollo Hospital Ent. 7248.75
Max Healthcare Inst 1166.60
Narayana Hrudayalay 1286.30
Aster DM Healthcare 486.85
Global Health 1098.95
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