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Wednesday 19 February 2020

Fortis board opts for Munjal-Burman combine’s bid

From its first hospital at Mohali in 2001, Fortis Healthcare has grown to be a leading integrated healthcare delivery service provider in India

New Delhi: Fortis Healthcare was trading 4% lower at Rs 146 on the BSE after the company said the board chooses the Hero Enterprises-Burman Family Office’s offer as the best for the hospital and diagnostic chain.

The board of Fortis Healthcare has recommended the binding offer of the Munjal-Burmans combine to the shareholders after almost 18 months of hectic parleys with several potential investors for the sale of its business.

The board decided by a majority to recommend the revised offer of Hero Enterprise Investment Office-Burman Family Office, made on 1 May, for an upfront equity infusion of Rs 800 crore at a price of Rs 167 per share through preferential allotment, Fortis Healthcare Ltd said in a late-night filing to the BSE.

The Munjal-Burmans further agreed to invest another Rs 1,000 crore via preferential issue of warrants priced at Rs 176 per share, it added. Of this Rs 250 crore will be upfront, being an amount equivalent to 25% of the consideration of warrants at a price of Rs 176 per share, the company said.

Fortis Healthcare had received binding offers from four entities – KKR-backed Radiant Life Care, IHH Healthcare, Manipal/TPG consortium, and Munjal and Burman family offices.

On 6 May, Manipal Health Enterprises had revised its offer for Fortis Healthcare Ltd (FHL) again, raising the value to Rs 8,358 crore. Earlier on 24 April, MHEPL and TPB combine had revised their offer for Fortis raising the value to Rs 6,322 crore. The earlier revised offer of 10 April valued Fortis hospital business at Rs 6,061 crore.

Malaysia’s IHH Healthcare Berhad and Munjals-Burmans (combine) had on 1 May revised upwards their respective offers for Fortis ahead of the deadline set by the board of the healthcare chain for submission of binding bids.

The IHH Healthcare Berhad increased its offer to directly invest in Fortis Healthcare at Rs 175 per share. It had earlier made a non-binding offer to invest in Fortis at Rs 160 per share.

IHH had then revised it to binding offer to immediately infuse Rs 650 crore by way of a preferential issue and allotment of equity shares at Rs 160 per share in FHL as part of an overall proposal to invest Rs 4,000 crore.

The Munjal-Burman combine also revised their proposal offering to increase their investment to Rs 1,800 crore, without any due diligence directly into the company from a previously revised offer of Rs 1,500 crore. Under their revised offer, they proposed to invest Rs 800 crore through a preferential allotment of equity shares at Rs 167 per share.

KKR-backed Radiant Life Care had also revised bid for Fortis with a binding offer to acquire its Mulund hospital for an enterprise value of Rs 1,200 crore and a proposal to acquire the stake in the hospital business. It had initially offered to acquire at least 26% stake in the healthcare chain at Rs 126 per share, excluding its diagnostic business SRL.

The fifth bidder, Fosun Health Holdings, an arm of Fosun International, which made a non-binding proposal to invest a total of $350 million (over Rs 2,295 crore) at a price up to Rs 156 per share, did not revise its offer.

From its first hospital at Mohali in 2001, Fortis Healthcare has grown to be a leading integrated healthcare delivery service provider in India.

Currently, the company has 45 healthcare facilities, around 10,000 potential beds and 314 diagnostic centres in India, Dubai, Mauritius and Sri Lanka.

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