Fortis stake sale: Malaysia's IHH Healthcare revises offer, prepared to inject Rs 650 crore immediately

New Delhi: In yet another twist in the race for Fortis Healthcare, IHH Healthcare Berhad on Tuesday made a binding offer to immediately infuse Rs 650 crore in the Indian firm as part of an overall proposal to invest Rs 4,000 crore.

The revised offer of the Malaysian firm comes two days ahead of a meeting of Fortis Healthcare Ltd (FHL) board to consider the recommendation by an expert advisory panel formed to finalise evaluation process of only binding offers.

IHH had earlier made a non-binding offer to invest Rs 4,000 crore in Fortis at Rs 160 per share.

Manipal-TPG combine and Munjals and Burmans were the only two groups which had made binding offers out of a total of five suitors in the race.

Fortis Hospital. Pic courtesy: Fortis Hospital official website

Fortis Hospital. Pic courtesy: Fortis Hospital official website

Chinese firm Fosun Health Holdings and KKR-backed Radiant Life Care had also made a non-binding expression of interests in FHL.

In a regulatory filing on Tuesday, Fortis Healthcare said it has received an "unsolicited binding offer" from IHH Healthcare with a proposal to invest directly in the company.

In a letter to the board of directors of FHL, IHH Healthcare Berhad MD and Group CEO Tan See Leng said the binding proposal was for an immediate primary equity infusion of Rs 650 crore in FHL by way of a preferential issue and allotment of equity shares at Rs 160 per share.

IHH has also demanded the right to appoint two directors on the board of FHL.

The Malaysian firm, however, said its binding offer is subject to it being allowed to do due diligence and receipt of relevant regulatory approvals.

In his letter, Leng further said its non-binding offer would include an investment of Rs 3,350 crore through a subsequent preferential issue and allotment of equity shares subject to satisfactory completion of due diligence at a share price not exceeding Rs 160 apiece.

IHH said its revised offer would automatically withdraw on 4 May.

On Monday, Hero Enterprise Investment and the Burman family had announced an extension of the validity of their improved joint binding offer to invest Rs 1,500 crore in FHL till 4 May.

The development followed the FHL board forming an expert panel last week to evaluate binding offers and make the final recommendation by 26 April.

The advisory committee constituted by the Fortis board to oversee evaluation process and function as an advisor to the board is headed by Deepak Kapoor, former chairman and CEO of Price Waterhouse Coopers, India.

The other members of the panel are Renuka Ramnath, former MD & CEO of ICICI Venture; and Lalit Bhasin, President, Society of Indian Law Firms & Managing Partner, Bhasin & Co.

On April 18, Hero Enterprise Investment Office and Burman Family Office improved their binding offer with a proposal to invest Rs 1,500 crore directly at a valuation of Rs 161.6 per share, from the earlier Rs 1,250 crore. They had stated that their improved offer was valid for five working days.

The Manipal/TPG-led consortium had raised their offer for Fortis to Rs 155 per share by valuing the hospital business higher at Rs 6,061 crore from Rs 5,003 crore in its initial offer on 27 March.

Fortis Healthcare had also received an unsolicited non-binding expression of interest from Fosun Health Holdings, an arm of Fosun International, with a proposal of primary infusion at a price up to Rs 156 per share up to a total investment of $350 million (over Rs 2,295 crore).

On the other hand, Radiant Life Care had offered to acquire at least 26 percent stake in Fortis at Rs 126 per share, excluding its diagnostic business SRL.

Shares of FHL on Tuesday ended 0.90 percent up at Rs 151.55 apiece on the BSE.

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Updated Date: Apr 24, 2018 19:15 PM

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