MunjalBurmans & IHH revise Fortis bid
TAKEOVER BATTLE Both firms raise offers before deadline BENGALURU/MUMBAI:
Cashstrapped hospital operator Fortis Healthcare Ltd said on Tuesday that two of its five suitors had boosted their bids to invest in the company as of a deadline for binding offers on Tuesday.
Malaysia’s IHH Healthcare Bhd lifted its offer to 175 rupees a share, a 9.4% premium to an earlier proposal. IHH earlier proposed injecting ₹650 crore ($98 million) immediately into Fortis.
Businessmen Sunil Munjal and Anand Burman increased their combined offer to invest in the company to ₹1,800 crore from ₹1,500 crore, via a subscription to shares and warrants. They have offered ₹167 per share and ₹176 per warrant.
Five companies and investment groups are vying to either control or partner with Fortis, which has 30-odd hospitals in India, as they bet on a rapid growth for the private healthcare market in Asia’s third-largest economy.
Tuesday noon (0630 GMT) was the deadline for binding offers, which will be evaluated by an expert advisory panel. Fortis’ board is due to meet on May 10 to consider the panel’s recommendations.
Manipal, another operator of Indian hospitals along with buyout firm TPG, last week raised its binding offer to buy Fortis’ hospitals business at a valuation of ₹6,322 crore, 4.3% higher than its previous bid. The group, the first suitor for Fortis, has until May 6 to further revise its offer.
Radiant Life Care Pvt. Ltd, backed by private equity firm KKR & Co, has also made a binding offer to acquire Fortis’ Mulund Hospital located in Indian financial hub Mumbai for an enterprise value of ₹1,200 crore.
It has also made a separate non-binding offer involving a separation of diagnostic services company SRL from the Fortis stake sale process.
China’s Fosun International is the other suitor. It made a nonbinding offer last month to invest up to $350 million subject to due diligence for a stake that would be less than 25%.
Due diligence has been a matter of concern for bidders of Fortis largely because the company’s books have not been audited, some of its land assets are under litigation, and a pending probe by the Serious Fraud Investigation Office (SFIO) for alleged fraud.
Meanwhile, the stalemate has started to affect the hospital operations. With clouds of uncertainty looming large, doctors have started to quit.
“Equipment especially in radiology needed upgradation. There was a greater need for looking into these areas,” said Dr Vijay Kher, former head of the department of nephrology. He left Fortis Escorts Heart Institute and joined Medanta Medicity. “I started feeling that my services were not utilized to the best of capabilities”, he said.