Fortis shareholders oppose merger with Manipal-TPG combine
Some shareholders of Fortis Healthcare Ltd have come together to oppose the sale of Fortis to the Manipal Health Enterprises-TPG Capital combine, two people directly aware of the development said on condition of anonymity.
The investors, led by India-focused hedge fund Eastbridge Capital, have approached several other shareholders of Fortis, including activist hedge fund Elliott Management Corp. and a mutual fund with a large shareholding, to oppose the deal.
The stance of Yes Bank Ltd, which owns close to 15% stake in Fortis, was not immediately known. Emails sent to Fortis, Eastbridge Capital, Elliott Management and Yes Bank remained unanswered until press time.
“This section of investors, which so far collectively account for close to 30% of Fortis shareholding, plan to write to Fortis’s board seeking an extraordinary general body meeting to replace the current board and induct new members and also call for a transparent auction process of Fortis to the highest available bidder,” said one of the two people cited above, requesting anonymity.
“The shareholders are opposed to the way the deal with TPG was structured and want a better valuation,” said the second person, also requesting anonymity. “The shareholders also want the board to find an alternative to
MUMBAI:
raising funds to buy back the stake in Fortis from Singaporebased Religare Health Trust for ₹4,650 crore; which is expected to help the company save up to ₹270 crore on service fees and ₹75 crore on interest costs.”
In an interview on March 28, Puneet Bhatia, co-managing partner and country head, TPG Capital, said that he expects the Fortis-Manipal deal to cross multiple hurdles. Bhatia did not elaborate on the nature of challenges the deal is likely to face. Emails sent to TPG and Manipal group remained unanswered till press time.
On March 28, the board of Fortis announced the sale of its hospital assets to the Manipal-TPG combine. Apart from hospital assets, Fortis’s board also approved the sale of 20% stake in SRL Diagnostics.