Let a panel eval­u­ate bids: IiAS

Financial Chronicle - - COMPANIES -

FOR­TIS Health­care share­hold­ers need an ob­jec­tive and in­de­pen­dent de­ci­sion-mak­ing body to ad­vise its board on the com­pany's sale, which has re­ceived three takeover bids, proxy ad­vi­sory firm IiAS said on Mon­day.

Cur­rently, there are three of­fers, which are ex­tremely di­verse, it said in a re­port. The of­fers are from Ma­ni­pal Health En­ter­prises, a joint one by Hero En­ter­prise In­vest­ment Of­fice and Bur­man Fam­ily Of­fice and Malaysia's IHH Health­care Ber­had.

In a re­port, 'Sho­lay, Satyam and For­tis Health­care', IiAS said the fo­cus should not be on the sim­i­lar­i­ties in their mis­con­duct, but draw­ing on the so­lu­tion that Satyam was of­fered.

"While the cur­rent sit­u­a­tion at For­tis is un­fold­ing in as dra­matic a fash­ion as Sho­lay (Hindi movie) did, its fall from grace is per­haps sim­i­lar to that of Satyam Com­puter Ser­vices," it said.

The de­ci­sion on which bid to ac­cept can­not be driven by val­u­a­tion alone as there are ques­tions re­gard­ing sub­se­quent con­trol and the is­sues re­gard­ing the ‘cur­rent pro­mot­ers' need to be dealt, it added.

Ac­cord­ing to the re­port, all the three op­tions have very dif­fer­ent con­se­quences for the fu­ture of For­tis and tak­ing the right call will now be cru­cial.

IiAS be­lieves the cur­rent board can get ad­di­tional sup­port in as­sess­ing the three bids and com­ing to a de­ci­sion among the com­plex sets of pulls and pres­sures, with­out nec­es­sar­ily wait­ing for board ex­pan­sion.

"As an al­ter­nate to ex­pand­ing the board, the com­pany must ap­point a spe­cial com­mit­tee to the board, that will ad­vise the board on the sale," it said.

"The com­mit­tee should be tasked with eval­u­at­ing the bids and struc­tures, nar­row in on the most suit­able buyer and ne­go­ti­ate the fi­nal con­tours and terms with the cho­sen buyer," it added.

As per the re­port, "share­hold­ers need a de­ci­sion-mak­ing body that is ob­jec­tive, in­de­pen­dent, and does have a his­tor­i­cal as­so­ci­a­tion with the pro­moter group or their com­pa­nies".

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