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Not a done deal yet! IHH to wait longer for Fortis board to make up its mind

IHH Healthcare has proposed to invest Rs 650 crore into Fortis right away at Rs 175 per share.The company will put another Rs 3,350 crore at Rs 175 per share after a week's worth of due diligence.

twitter-logo BusinessToday.In   New Delhi     Last Updated: May 18, 2018  | 20:44 IST
Not a done deal yet! IHH to wait longer for Fortis board to make up its mind

Malaysia-based IHH Healthcare Berhard has extended the acceptance period of its proposal for Fortis Healthcare to May 29, after which it will expire. This move comes close on the heels of the Manipal-TPG consortium bettering their offer for stake in the hospital business of the Fortis group. The previous validity of the bid by IHH Healthcare expired on May 15.

IHH Healthcare has proposed to invest Rs 650 crore into Fortis right away at Rs 175 per share. In lieu of this, the Malaysian healthcare firm has asked for two seats on the Fortis board. The company will put another Rs 3,350 crore at Rs 175 per share after a week's worth of due diligence. It will take up about 30 per cent stake in Fortis and will have to talk to minority investors for another 26 per cent under the change-of-control open offer. All of this is expected to take IHH Healthcare's total investment in Fortis to Rs 7,400 crore for 56 per cent stake in the cash-strapped healthcare firm.

In a letter to the Fortis Board, the company said that it is strongly committed to participate in the bid for Fortis Healthcare and keen to understand what the Board will do in wake of Manipal-TPG combine revising its bid.

"If there is indeed a new bid process that the Board is proposing to initiate, we would like to participate in such a process and request that we be kept informed of any developments regarding the same," IHH Healthcare MD and CEO Tan See Leng wrote to the Fortis Board.

Considering that its enhanced revised proposal expired on May 15, the company has extended the acceptance period of its bid to May 29, the letter further read. Meanwhile, IHH Healthcare also stressed in the letter to the Fortis Board that its proposal must be accepted in its entirety and is not to be clubbed with any investment bid from a third party.

After the recent revision in the acceptance period deadline, the offer stands till May 29. Before IHH revised its deadline, the Manipal-TPG combine had already sweetened its bid. The consortium is now offering Rs 180 per share instead of its previous bid of Rs 160 per share, and has offered to invest Rs 2,100 crore promptly.

However, it is unclear whether the Fortis board is keen to take a look at the revised bids. Earlier this month, the board had chosen the bid jointly submitted by Sunil Kant Munjal of Hero Enterprises and the Burman family office of Dabur group. The decision was not unanimous, though, with three out of eight members of the board voting against the Munjal-Burman offer. Financial advisors Arpwood Capital and Standard Chartered had reportedly spoken in favour of bids from Manipal-TPG combine and IHH Healthcare. The decision sparked criticism and the discontent rival bidders  said they would approach shareholders directly with rival bids.

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