GIC, Capital buy KKR stake in Max Health

While Kotak Investment Banking was the advisor to KKR, Kotak Securities and Jefferies India advised the buyers.

GIC, Capital buy KKR stake in Max Health
ck deal would also see the promoters’ stake falling to about 24%.

Singapore’s sovereign wealth fund GIC and US financial services company Capital Group were among others to buy global investment firm KKR’s entire 27.54% stake in Max Healthcare Institute. A number of domestic institutional investors were also part of the block deal, which was struck on Tuesday.

US private equity major, which was the largest shareholder, exited the New-Delhi based hospital chain for about `9,290 crore.

Max Healthcare’s shares soared as high as 12% intra-day and closed up 9.72% at `396.70.

KKR, which held the stake through an affiliate firm Kayak Investments Holding, sold its entire 267 million shares. The stake sale at `353 per share was executed in three tranches, sources close to the development said. This was at a 2.36% discount to Max Healthcare’s Friday’s closing price of `361.55. According to sources, the offer price range for the deal was fixed at `350-361.90 per share (ranging between 0% and 3.29% discount to close price of `361.9 on Tuesday).

Also read KKR plans to exit Max Healthcare: Deal could be at 5% to existing share price

While Kotak Investment Banking was the advisor to KKR, Kotak Securities and Jefferies India advised the buyers.

Following the deal, KKR will have to relinquish two board seats in Max Healthcare. On its part, the hospital firm will nominate two non-independent directors on the board. Abhay Soi will remain the chairman and managing director of the company.

As of June 2022, the company’s promoters held a 50.64% stake, mutual funds 19.21% and foreign institutional investors 23.34%. Non-institutional investors held a 6.61% stake, other domestic institutional investors held 0.17% and that by insurance companies stood at 0.04%. SBI Focused Equity Fund, with a 9.27% stake, is the highest public shareholder in the firm, according to stock exchange data.

The block deal would also see the promoters’ stake falling to about 24%.

Also read Max Healthcare Q1 net up 12 pc at Rs 229 cr

As of June 2021, Kayak Investments held 456.3 million shares, totalling 47.24% stake in the firm, and has been diluting its stake over the past one year. Later in September, it sold 84.4 million shares for `2,956 crore through open market transactions. These shares were acquired by SBI Mutual Fund, HDFC Mutual Fund and Veritas Funds, among others. In March this year, Kayak Investment sold 10% of Max Healthcare for nearly `3,300 crore.

In 2018, KKR along with Mumbai-headquartered Radiant had acquired a 49.70% stake in Max Healthcare from South Africa-based Life Healthcare Group Holdings, an equal joint venture partner in Max Healthcare Institute along with Max India, for about `2,120 crore. KKR-Radiant had acquired more than 266 million shares in Max Healthcare at `80 per share through the deal.

KKR’s exit plans follow its closure of a $4-billion Health Care Strategic Growth fund in January, which focused on biopharmaceutical, medical devices, healthcare services, life science tools, diagnostics, and healthcare information technology sub-sectors.

Max Healthcare operates 17 facilities, with more than 3,400 beds, across Delhi-NCR, Haryana, Punjab, Uttarakhand and Maharashtra. Apart from hospitals, Max Healthcare also operates homecare and pathology businesses under brand names Max@Home and Max Labs, respectively.

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