Fortis stake sale: Board outlines fresh bidding process, bidders given 10 days for financial, legal due diligence

Bengaluru: Cash-strapped Fortis Healthcare Ltd laid out plans on Tuesday for a fresh bidding process, after it became the subject of a bidding war by suitors seeking to cash in on an expected boom in India’s private healthcare market. Five local and overseas suitors became engaged in a race to either take over or buy a stake in Fortis Healthcare, forcing them to revise their initial offers. On Tuesday, Fortis invited three of those suitors to participate in a new bidding process - the Hero-Burman group, a consortium of TPG and Manipal Health Enterprises, and Malaysia’s IHH Healthcare Bhd - as well as any other parties interested in bidding. Bidders in the new round should submit their offers by 14 June, with a minimum investment of Rs 1,500 crores  by way of preferential allotment. They were given 10 days to conduct financial and legal due diligence. The bids should also provide a plan for funding Fortis’s acquisition of RHT Health Trust’s Indian assets, agreed in November, and options to private equity investors to exit Fortis’s unit SRL Ltd. Spokespersons for IHH, Hero-Burman and Manipal declined to comment Fortis’ board of directors is scheduled to meet on 30 May (today) to consider and approve the audited financial results for the quarter and financial year ended 31 March, 2018. In their letter, Munjal-Burman combine said “this situation may have arisen largely on account of the lack of information available to stakeholders. Munjal-Burman offer The Munjal-Burman combine, whose bid for investing Rs 1,800 crore was approved by its board, consented to re-opening the bidding process to enable the company to move ahead with the fund-raising transaction. The development comes at a time when there is an uncertainty over the process of sale of Fortis as four of the directors, who had approved the Munjals-Burmans bid, are no longer on the company’s board. [caption id=“attachment_4462927” align=“alignleft” width=“380”]  Fortis. Representational image. Reuters.[/caption] In a regulatory filing, Fortis Healthcare said it has received a letter from Hero Enterprise Investment Office and Burman family Officer …giving their consent to re-open the bidding process to enable the company to move ahead with the fund-raising transaction. In a letter to the board of directors, Munjal-Burman combine said “it appears that there may be indecision on the part of the company regarding the bid process, which we understand could be on account of a few shareholders indicating their preference to the company for re-open of the bid process”. While expressing “deep anguish and regret” over the matter, Munjal-Burman combine said they have has consented to re-opening of the bidding process “in order to facilitate the company to expeditiously finalise and close its fund-raising so that the company’s business does not suffer any further”.   Standard Chartered Bank and Arpwood Capital are acting as financial advisors to Fortis, while Cyril Amarchand Mangaldas and Vaish Associates are legal advisors. (With inputs from agencies)