After receiving bids from four possible suitors, the board of Fortis Healthcare Ltd on Thursday approved the constitution of an expert advisory committee to oversee the evaluation of all binding proposals in connection with the infusion of funds in the company. The committee, chaired by Deepak Kapoor, Former Chairman and CEO of Price Waterhouse Coopers India, will provide a report of its recommendation to the board by April 26. The board also approved the appointment of Rohit Bhasin as an Additional Director (Independent) of the Company with immediate effect for a period of five years.
The race to acquire Fortis is heating up. A day after Chinese investment giant Fosun offered to pump in up to Rs 2,295 crore in the cash-strapped Indian healthcare chain, Fortis Healthcare Ltd (FHL) on Thursday said it has received a revised offer from Munjal-owned Hero Enterprise Investment Office and Burman Family Office. Also, Malaysia's IHH Healthcare Berhad has said it is ready to infuse Rs 4,000 crore through a preferential allotment of shares at Rs 160 apiece.
In a stock exchange filing, Fortis said that the Munjal-Burman Family has sent a 'improved binding offer' to invest Rs 1,500 crore directly in the company. Earlier, Fortis had received an 'unsolicited binding offer' worth Rs 1,250 crore from Munjals and Burmans.
Spelling out the details of their offer, the Munjals and Burmans in a joint letter said, the offer is "faster to implement and without any due diligence. We are proposing to invest Rs 1,500 crore directly in the company". Munjals and Burmans have offered to invest Rs 750 crore upfront.
Incidentally, the group entities of Hero Enterprise Investment Office and the Burman family of the Dabur Group currently hold a stake of around 3 per cent in FHL. This is not the first time that Hero has shown interest in Fortis. Last July, they had even signed a non-disclosure agreement to explore the possibility of a merger but the discussions ended in an impasse because Hero wanted to conduct due diligence before it could state the commercials, including a price, while FHL wanted the reverse order.
Malaysian healthcare major IHH had last week joined the race to acquire Fortis Healthcare. IHH operates healthcare facilities across nine countries via a network of 49 hospitals including Mount Elizabeth and Gleneagles in Singapore.
"As part of the IHH proposal and subject to satisfactory completion of due diligence... We are ready to infuse Rs 4,000 crore through a preferential allotment of equity shares at a price not exceeding Rs 160 per share which will fund the buyout of RHT Health Trust assets as well as provide immediate liquidity towards working capital and infrastructure upgrades," IHH said.
In March, the Fortis board had approved de-merger of its hospitals business, which was to be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 per cent stake in diagnostics chain SRL Ltd, in a Rs 3,900-crore deal.
Till last month Fortis Healthcare Ltd (FHL) just couldn't seem to dodge bad news, be it losing an arbitration case, downgraded credit ratings, investigations into alleged financial irregularities or dipping share prices. And now it's quite the belle of the ball with three suitors.
Last week, Manipal Health Enterprises (MHEPL) had upped its merger offer by 21 per cent. Manipal first offered to buy Fortis last month in a deal that would combine its 14 hospitals with Fortis portfolio of 34 hospitals, creating a formidable rival to Apollo Hospitals Enterprise Ltd. But the previous bid, which offered shareholders 10.83 shares in the combined company for every 100 Fortis shares held, was panned by investors.