Munjal-Burman ready for Fortis rebid
The Munjal-Burman combine is open to the idea of a rebid for Fortis Healthcare, and will not challenge such a decision by the proposed newly- constituted board, it is learnt. The duo is looking at improving its earlier offer of ~180 billion to buy Fortis, thereby upping the stakes in the battle. The Fortis board had last week accepted an offer from Hero Enterprise Investment Office and Burman Family Office. An extraordinary general meeting (EGM) was called on Tuesday to decide who takes control of Fortis. Although the EGM agenda was to recast the board including removal of four directors and appointment of three new ones, resignations came just a day ahead of the meeting. Three directors — Harpal Singh, Tejinder Singh Shergill and Sabina Vaisoha —stepped down from the board before the EGM. The results of the EGM vote are expected on Wednesday. The Burman-Munjal consortium, when contacted, declined to comment on any of the issues. The combine may tap private equity funds as one of the ways to raise money, sources said. The combine will also make an open offer in accordance with the rules and guidelines of the Securities and Exchange Board of India (Sebi), allying fears among some minority shareholders that they might not do so after winning the bid, sources said. The war chest required for winning the bid could be in the range of ~60-70 billion. The winning bidder has to pay over ~36 billion to the real estate trust based in Singapore, which controls many of the key hospital assets of Fortis. An agreement has been signed between Fortis Healthcare and the trust in this regard. Those involved in the deal pointed out that the winning bidder would also require funds to the tune of around ~12 billion to make an open offer. The winner would also have to invest at least ~5 billion additionally in the chain as a going concern. “We do not see anyone turning it around in the next five years,” says one of the bidders. Fortis Healthcare had received several competing bids which included Manipal Hospitals with TPG, IHH and Chinese giant Fosun. Three days after the final bid was finalised, Manipal-TPG raised its earlier offer by 12.5 per cent. Even IHH has revised its bid many times.