ibusinesslines.com August 19, 2018

Decks clear for Hero-Munjal consortium to takeover Fortis

11 May 2018, 11:18 | Melissa Porter

Fortis shares fall 4% after board approves investment offer from Hero, Dabur family office

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Shares of Fortis Healthcare fell almost 3 per cent today after the company announced that its board has picked the offer from Munjals-Burmans combine over four other suitors who made binding offers. Intra-day, it slumped 4.39 per cent to Rs 145.75.

The rejected offers include bids by TPG-backed Manipal Health Enterprises Pvt. and KKR-backed Radiant Life Care Pvt.

"We looked at all the different binding bids from the point of view of certainty versus risk".

"The Board, by a majority, chose to recommend the Hero-Burman family offer to shareholders looking at the binding bids for the point of certainty of liquidity flowing into the company", Fortis Director Brian Tempest told reporters.

The Hero-Munjal consortium has emerged victor in the race for Fortis Healthcare Ltd. They had added that "considering the need for a certain and quick solution for the company, it was considered prudent that only binding bids should be considered".

Meanwhile, having lost out to Munjals-Burmans combine, Malyasia's IHH Healthcare said it is looking to speak to the shareholders of Fortis even as it evaluates options for its future course of action.

"We are sure that the shareholders will see the intrinsic value in our proposal and repose confidence in us".

A major Fortis shareholder, however, which favored an offer over twice the size from Malaysia's IHH Healthcare Bhd (IHHH.KL), told Reuters it was unhappy with the decision and planned to vote against it at a meeting expected within a month. They have also demanded three board seats and proposed to divest diagnostics chain SRL Laboratories, use the proceeds to buy assets of RHT Holdings.

"Our offer comprised a significant and necessary immediate investment, a clear strategic plan to fundamentally transform Fortis, as well as synergies from a combination with Manipal".

Yes Bank became Fortis' largest shareholder with 15 percent stake after it invoked the shares pledged by Malvinder Singh and Shivinder Singh, the erstwhile promoters of Fortis, who now own around 0.77 percent stake in the company.

Here's a recap of all the offers made to Fortis Healthcare.

Fortis Healthcare's board has approved a binding offer from Munjal's and Burman's family offices late on Thursday.

The Munjals-Burmans combine further agreed to invest another Rs 1,000 crore via preferential issue of warrants priced at Rs 176 per share. Since then, more players entered into the fray with counter offers and as a result the consortium of Manipal Health Enterprise-TPG Capital too revised their proposals thrice with the equity valuations being Rs 5,003 crore, Rs 6,061 crore, Rs 6,332 crore and Rs 8,358 crore.

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