CIMB Securities has maintained its BUY call on IHH Healthcare Bhd with a target price of RM10.30, saying a forensic audit ordered by the Delhi High Court could prolong the overhang surrounding its mandatory takeover offer (MTO) for Fortis Healthcare but should have minimal impact on IHH.
The court appointed the forensic auditor following an application by Daiichi Sankyo to trace the alleged dissipation of assets linked to former Fortis promoters Malvinder and Shivinder Mohan Singh.
The legal dispute dates back to Daiichi’s 2008 acquisition of Ranbaxy Laboratories, after which it alleged the Singh brothers had concealed information and fabricated regulatory data. The proceedings eventually contributed to the suspension of IHH’s MTO for an additional 26% stake in Fortis.
IHH acquired a 31.17% stake in Fortis in December 2018, triggering the MTO. The offer remains suspended pending the resolution of the legal proceedings.
CIMB Securities said the latest Delhi High Court order has no direct implications for IHH, although the forensic audit could further delay the MTO.
Even if the suspension is lifted, the research house expects limited shareholder take-up as Fortis’ current share price of INR907 remains well above IHH’s original offer price of INR170.
CIMB Securities said IHH could instead explore alternatives such as a potential share-swap involving Gleneagles India and Fortis, which could lift its effective Fortis stake by around 5-6 percentage points to 36-37% and potentially add 1-2% to its target price.
The research house made no changes to its FY26-FY28 earnings forecasts.
As of 10.47 am, the stock price dropped 1.72% to RM8.01.
