IHH puts money where its mouth is, makes binding offer for Fortis

Marco Green
April 24, 2018

It is also subject to confirmation by Fortis that IHH will be given immediate access to carry out a legal and financial due diligence and the receipt of applicable approval from Fortis' shareholders and any relevant regulatory approvals.

The move competes with offers such as the Rs 1,500 cr offer from the combined team of the Munjals of Hero Motocorp and Burmans of Dabur, as well as a merger proposal from Manipal TPG group that values Fortis Healthcare at Rs 5,000 cr.

IHH Healthcare Bhd, which previously made a non-binding offer to invest up to 40 billion rupees (RM2.36 billion) for much sought after Fortis Healthcare Ltd, has revised its offer to a binding immediate equity infusion of 6.5 billion rupees without prior due diligence and a non-binding proposal for a subsequent infusion of up to 33.5 billion rupees.

The company has received binding offers only from TPG-backed Manipal Health, IHH Healthcare and a consortium of Hero Enterprise Investment Office and the Burman Family Office.

The development followed the Fortis board forming an expert panel last week to evaluate binding offers and make the final recommendation by April 26. The improved bind offer's total valuation is Rs.1,500 crore compared to its Rs.1,250 crore made earlier. "Their letter stated that "...we are hereby extending the validity period till May 4, 2018, or as otherwise extended by us in writing and the term of validity period in the improved offer letter should be construed accordingly". The non-binding aspect of the overall proposal is to invest Rs 3,350 crore with due diligence and other conditions.

On Monday, Hero Enterprise Investment Office and companies part of the Burman Family Office had extended the validity period of their improved offer till May 4. It alleged that both Rohit Bhasin, appointed as an additional director, and Deepak Kapoor, appointed the head of the expert advisory committee, are closely associated with PricewaterhouseCoopers (PwC). The other members of the panel are former MD & CEO of ICICI Venture Renuka Ramnath, and Society of Indian Law Firms president Lalit Bhasin.

The revised offer includes a binding proposal for an immediate infusion of Rs 650 crore ($98.0 million).

However, Radiant Life Care has preferred to buy a minimum of 26 percent stake in the target company at Rs.126 a share.

However, Fortis Healthcare on March 27 had announced plans to demerge its hospitals business (Fortis Hospitals) into Manipal Hospital Enterprises Private Ltd (Manipal Hospitals).

Besides Radiant, Fortis Healthcare has received "an unsolicited non-binding" EoI from Fosun Health Holdings for a possible due diligence.

Other reports by Click Lancashire

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