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CVC Capital makes revised open offer at ₹130/share to Healthcare Global Enterprises shareholders

Chennai | Updated on June 04, 2020 Published on June 04, 2020

Temasek, IFC, host of MFs own stakes in HGE

Our Bureau Private equity fund CVC Capital has entered into an agreement with the promoter of Healthcare Global Enterprises (HGE) to buy out the latter and made a fresh enhanced open offer to its public shareholders on Thursday at ₹130 a share. Following the announcement, shares of HGE jumped 5.4 per cent to ₹120.

In a disclosure to the stock exchanges, HGE said, Aceso Company, Singapore, (along with Aceso Investment Holdings, CVC Capital Partners Asia V LP, CVC Capital Partners Investment Asia VL and CVC Capital Partners Asia V Associates LP) and Dr BS Ajaikumar (promoter of HCG), entered into an agreement to subscribe to 2.95 crore equity shares and 1.856 crore warrants (convertible into an equal number of equity shares) of the company, in tranches, at ₹130 a share, aggregating to ₹625 crore.

Earlier, on May 7, CVC Capital had announced its plan to acquire about 36.48 per cent stake in HGE through a preferential allotment of shares at ₹100 a share and made an open offer to the public shareholders at the same price.

As per the revised mandatory open offer, JM Financial, manager to the issue, has made an offer to acquire up to 3.26 crore fully paid-up equity shares from the public shareholders, representing 26 per cent of the expanded voting share capital, at ₹130 a share, aggregating to ₹423.97 crore.

The total shareholding of the acquirer in the target company, together with the equity shares and warrants to be so exercised will be 3.657 crore equity shares, constituting 29.16 per cent of the target company’s expanded voting share capital. The acquirer has also agreed not to exercise the balance 1.15 crore warrants until the expiry of 15 business days from the completion of the open offer.

Big holding by institutions

Currently, promoters hold 23.9 per cent stake in the company. Institutions, both domestic and foreign, have heavy exposure to HGE. Among the public, mutual funds hold 17.56 per cent (Kotak Equity Opportunities 1.01 per cent; Nippon India Pharma Fund 1.18 per cent; Sundaram MF 8.68 per cent; Tata MF 2.27 per cent; and Franklin India Smaller Companies Fund 3.36 per cent). Foreign portfolio investors hold 25.05 per cent stake in the company. Among them are International Finance Corporation with 4.91 per cent stake.

V-Sciences Investments, a wholly-owned subsidiary of Temasek Life Sciences, holds 9.38 per cent stake in the company.

While close to 9,500 small retail investors hold 3.71 per cent stake in the company, 67 high networth individuals own 6.7 per cent stake in HGE.

For the December quarter of FY20, HGE had posted a loss of ₹4.27 crore on revenues of ₹172.98 crore. For FY18-19, the company had reported a profit of ₹7.25 crore and revenues of ₹640.5 crore.

Published on June 04, 2020

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