Fortis board set to announce deal with Manipal-TPG
MUMBAI:After months of intense negotiations, the board of Fortis Healthcare Ltd is set to announce the sale of its hospital assets to a combine of Manipal Health Enterprises Pvt. Ltd and buyout firm TPG Capital, two people directly aware of the development said on condition of anonymity.
The deal, which values Fortis’s hospital assets at around ₹10,200 crore, will be a two-step process, according to the terms of the transaction. In the first step, the hospital assets of Fortis Healthcare will separated into a new entity. The new listed entity will then absorb Manipal Health.
The TPG-Manipal combine will pay ₹3,900 crore for close to a 38% stake in the combined entity.
Alongside, TPG-Manipal will also buy a 51% stake in diagnostic chain SRL Laboratories, of which 20% will come from Fortis and 31% from existing investors Avigo Capital, Jacob Ballas and IFC, leaving Fortis with a 36% stake in the Mohali-based firm.
Once the board approves the merger, the proposal will be put to vote before shareholders in a special meeting scheduled to be held in the next 30 days.
An email sent to Fortis Healthcare remained unanswered until press time. Manipal Health and TPG didn’t immediately respond to emails seeking comment.
The deal, if it goes through, will catapult TPG-backed Manipal Health to pole position among India’s largest hospital chains, with a combined annual revenue of ₹5,400 crore.
The combined entity will also become the largest hospital chain in terms of number of beds (around 5,600 against current leader Apollo Hospitals Enterprise Ltd’s 4,550).
Earlier in the day, Fortis Healthcare said it had received an unsolicited non-binding offer from Manipal Health Enterprises. Fortis said that its board is evaluating the proposal received on March 23, 2018.
The board of the company has received an unsolicited nonbinding indication of interest from Manipal Health for possible transaction with the company, Fortis Healthcare said in a filing to the BSE.
“The said proposal is still under evaluation by the management and no firm decision in this regard has been taken by the board,” it added.
Fortis Healthcare has been without a defined promoter ever since the shareholding of founders Malvinder and Shivinder Singh dropped to a minuscule 0.77% following the sale of their pledged shares by some lenders in February this year.