IHH Healthcare Launches Major Acquisition Moves in Fortis and Malar with Open Offers, SEBI Approval, and Significant Interest Payments

Key Takeaways for Investors

• IHH Healthcare Berhad is executing a multi-step acquisition strategy involving Fortis Healthcare Limited and Fortis Malar Hospitals Limited in India, which includes a substantial subscription of new shares and two mandatory open offers.
• SEBI has granted approval for the updated Letters of Offer for both open offers, triggering the official commencement of the acquisition process.
• The open offer for Fortis Healthcare targets up to 197,025,660 shares, representing 26.10% of expanded voting share capital at an offer price of INR170 per share, plus a substantial interest component for certain shareholders.
• The Malar Open Offer targets up to 4,894,308 shares, representing 26.11% of voting share capital at an offer price of INR17.6 per share, also with an interest component for eligible shareholders.
• Eligible shareholders will receive interest at 10% per annum from a key Supreme Court order date (22 September 2022) to actual payment, which could be a significant windfall for qualifying investors.
• The completion of both offers is expected in Q4 2025, with no material impact anticipated on IHH’s earnings for 2025, barring unforeseen circumstances.
• The transaction has been in progress for several years, with key regulatory and legal milestones shaping its timeline.

Detailed Analysis for Investors

IHH Healthcare Berhad (“IHH”), one of Asia’s leading private healthcare providers, has announced a series of major transactions that could reshape its footprint in India’s healthcare sector. The move involves three critical components:

1. Subscription of New Equity Shares in Fortis Healthcare Limited:
   • IHH, via its indirect wholly-owned subsidiary Northern TK Venture Pte Ltd (“NTK”), will subscribe to 235,294,117 new equity shares of INR 10 each in Fortis through a preferential allotment. This increases IHH’s stake and influence in Fortis.
2. Mandatory Open Offer for Fortis Shares:
   • NTK will launch an open offer to acquire up to 197,025,660 shares (26.10% of expanded voting share capital) at INR 170 per share (approx. RM8.07).
   • Eligible shareholders are entitled to an additional INR 53.80 per share (approx. RM2.55) as interest, calculated at 10% per annum from 22 September 2022 until payment date. This benefit applies to those who were shareholders on 4 December 2018 and remain so as of 6 October 2025.
   • This offer could deliver a notable premium to shareholders who qualify for the interest payment, representing a potentially lucrative exit for long-term holders.
3. Mandatory Open Offer for Malar Shares:
   • NTK is similarly launching an open offer for 4,894,308 shares (26.11% of voting share capital) in Fortis Malar Hospitals Limited, at INR 17.6 per share (RM0.84).
   • Eligible shareholders will receive an additional INR 18.36 per share (RM0.87) as interest, also at 10% per annum from 22 September 2022 until payment, applicable to those holding shares as of 24 December 2018 and still holding on 6 October 2025.

Regulatory Milestones and Timeline

After a lengthy regulatory journey and multiple announcements since 2018, IHH has finally received SEBI approval to dispatch updated Letters of Offer for both open offers as of 9 October 2025. The “Identified Date” for eligible shareholders is 6 October 2025. These offers are now live, and the documentation is available via SEBI, BSE, and NSE portals.

Impact on IHH Healthcare and Market Implications

• Potential Share Price Catalyst: This transaction could be price-sensitive. The large scale of the acquisition, with a substantial premium and interest payout, may attract investor attention and drive both Fortis and IHH share price movements. The payout for eligible Indian shareholders could also prompt significant trading activity in Fortis and Malar shares as investors position themselves for the offer.
• Long-Term Strategic Shift: IHH’s expanded presence in India strengthens its position in a high-growth market, potentially impacting future earnings and valuation multiples—especially as the integration proceeds post-acquisition.
• No Immediate EPS Impact Expected: IHH clarified that, barring unforeseen circumstances, the open offers are not expected to have a material effect on IHH’s earnings or EPS for the financial year ending 31 December 2025, given timing of completion in Q4 2025.
• Risk Factors: Investors should review the Letters of Offer for Fortis and Malar for detailed risk disclosures, as regulatory, legal, and operational integration risks remain.
• Exchange Rate Note: All currency conversions are based on the INR100:RM4.7482 rate as of 9 October 2025.

What Should Shareholders Watch?

• Completion Timeline: Both open offers are expected to conclude in Q4 2025. Any delays or changes could impact deal economics and market sentiment.
• Further Announcements: IHH will continue to update Bursa Malaysia Securities on any material developments. Investors should monitor these releases for any price-sensitive updates.
• Eligibility for Interest Payment: Only shareholders who held Fortis shares as of 4 December 2018 (for Fortis) and Malar shares as of 24 December 2018 (for Malar), and who continue to hold them as of 6 October 2025, qualify for the interest payout—a key consideration for those seeking to benefit from the transaction.

Disclaimer: This article is for informational purposes only and should not be considered investment advice. Investors are urged to review official announcements and offer documents, and consult with their financial advisors prior to making any investment decisions. The information herein is subject to change based on further corporate disclosures and regulatory updates.

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