Malaysia's IHH Healthcare Berhad and a consortium of Hero Enterprise Investment Office and the Burman Family Office have revised their bids for Fortis Healthcare Ltd yet again, in the five-way takeover battle that could see the biggest transaction in the Indian hospital sector.
IHH Healthcare will make an immediate equity infusion of Rs 175 per share, Fortis said in a stock market disclosure, referring to the revised proposal.
It added that the subsequent equity infusion will be at a share price not exceeding Rs 175, subject to satisfactory completion of the due diligence process and mutually acceptable binding definitive documents.
“We now wish to reiterate our seriousness and commitment to an investment in the company by enhancing the revised IHH proposal,” it noted.
This is the third time that IHH has revised its offer for Fortis. Last week, the Malaysian hospital operator’s revised bid had proposed an immediate infusion of Rs 650 crore by way of a preferential allotment in a binding offer.
Subsequently, it would infuse another Rs 3,350 crore ($504.25 million) in a non-binding proposal after satisfactory completion of all legal and financial due diligence, and the execution of mutually acceptable binding definitive documents.
IHH’s fund infusion via a preferential issue was to take place at Rs 160 per share.
Shares of Fortis closed at Rs 152.20 apiece on the BSE on Monday. Stock markets are closed on Tuesday on account of Labour Day.
Munjal-Burman revised bid
Meanwhile, the consortium of Hero Enterprise Investment Office and the Burman Family Office said it proposes to invest Rs 1,800 crore immediately. It will invest Rs 800 crore through a preferential issue of equity shares at Rs 167 apiece and Rs 1,000 crore through a preferential issue of warrants at Rs 176 each.
Hero Enterprise is led by chairman Sunil Munjal, part of the family that runs Hero MotoCorp Ltd, India’s biggest two-wheeler maker. The Burman family is the promoter of Dabur India Ltd. Their consortium had earlier proposed to invest Rs 1,500 crore in its revised bid.
The Fortis sale has witnessed several twists and turns with other bidders, including TPG-Manipal and KKR-backed Radiant Life Care Pvt. Ltd, also revising their bids time and again. China’s Fosun has also submitted a non-binding bid.
Last week, Fortis had said that its board will meet on 10 May to consider the recommendations of an external advisory committee (EAC), which was formed to evaluate the binding bids. The deadline to submit the bids was also extended till 1 May following the resignation of EAC member Renuka Ramnath.
The committee is chaired by Deepak Kapoor, the former chairman and CEO of consultancy firm Price Waterhouse Coopers, India.
Meanwhile, two of its investors – Jupiter India Fund and East Bridge – had raised concerns about some directors on the board. Last week, Fortis had given in to pressure from the activist investors and invited three new independent directors to join its board before finalising a suitor for the business.
It now appears that at least two of these additional directors – Ravi Rajagopal and Suvalaxmi Chakraborty – are affiliated with firms that have existing relationships with the suitors for Fortis. This is likely to further complicate the process of the Fortis sale.