Munjal-Burman combine extends validity of revised offer to buy Fortis
Photo Credit: Shah Junaid/VCCircle

Fortis Healthcare Ltd said on Monday that the validity of a revised binding offer from the Hero Enterprise Investment Office of the Munjal family and the Burman Family Office of consumer goods firm Dabur to buy the hospital chain has been extended till May 4.

The company said in a stock exchange disclosure that the decision was made in light of Fortis announcing last Thursday that it would form a panel to evaluate all binding offers, as five suitors vie for India’s second-largest hospital chain.

The expert advisory committee will submit its recommendations by the coming Thursday. The panel is chaired by Deepak Kapoor, former chairman and chief executive officer of consultancy firm Price Waterhouse Coopers, India.

The revised binding offer made last Thursday from Hero Enterprise and the Burmans entails an investment of Rs 1,500 crore in Fortis, up from Rs 1,250 crore proposed earlier.

The revised offer is for investing Rs 500 crore through preferential shares and Rs 1,000 crore via warrants. The first offer, made the previous week, involved an infusion of Rs 500 crore and Rs 750 crore after due diligence.

The Munjal-Burman combine is also seeking two board seats.

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. The two family offices hold around 3% of Fortis through their affiliates and group entities.

Other bidders in the fray to buy Fortis are TPG-backed Manipal Health, Malaysia’s IHH Healthcare, China’s Fosun International and KKR-backed domestic hospital chain operator Radiant Life Care Pvt. Ltd.

The offers from Manipal and Munjal-Burman are binding.

IHH also revised its offer last week, proposing to invest Rs 4,000 crore in Fortis through a preferential allotment of shares at Rs 160 apiece.

Manipal had also sweetened its initial offer.

Last month, the Fortis board had approved the sale of its hospital business to Manipal Health.

The Fortis sale has been delayed due to the legal cases against its founders, brothers Malvinder and Shivinder Singh, who lost control of the healthcare firm after their stakes plunged to low single digits.

In February, the Singh brothers had resigned from the board and now own just 0.77% in Fortis, compared to the 25% stake they held at the end of December 2017, stock-exchange filings show.

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