The battle for Fortis took got another twist after the healthcare company announced that its board will meet on May 10 to take a decision on the binding bids for the company as recommended by the expert advisory committee.
Notably, the plot so far has seen a lot of twists, with each major contender revising their offer to better the others.
As on date, the company has four binding offers from four heavyweights– KKR-backed Radiant Life Care, Malaysian major IHH Healthcare, Manipal/TPG consortium and Munjal and Burman family offices.
According to the company’s statement, the committee will evaluate all binding bids received forenoon of May 1, giving these bidders another 3 days to revise their offers. We take a closer look.
KKR-backed Radiant Life
PE giant KKR backed Radiant Life Care has submitted a binding offer to pick up Fortis Healthcare Mulund hospital in Mumbai for an enterprise value of Rs 1,200 crore.
Radiant contends that this will help Fortis to get immediate cash. Apart from picking up the Mulund Hospital, Radiant seeks to spin off of the diagnostic business.
It has made a non-binding offer to acquire only the hospital business of Fortis at a valuation of Rs 126 per share, according to a statement by the company. Further, Radiant Life Care has sought a rights issue to fund the acquisition of assets from RHT.
Malaysian major IHH
After a lot of back and forth, Malaysia’s IHH has submitted a binding offer to infuse Rs 650 crore in the Indian firm as part of an overall proposal to invest Rs 4,000 crore.
Notably, the revised proposal values Fortis at Rs 160 per share. Earlier, the healthcare giant had made a “non-binding expression of interest” and was willing to pay up to Rs 160 per share.
In IHHs assessment, Fortis would need an equity infusion of around Rs 400 crore for working capital and buying the asset portfolio of RHT Health Trust.
Accordingly, IHH’s offer has two components, a Rs 335 crore in Fortis through preferential allotment of shares and a non-binding offer for the second larger tranche.
One of the earliest contenders, Manipal Health Enterprises has raised its offer for Fortis Healthcare by valuing its hospital business higher at Rs 6,322 crore.
Interestingly, in order to woo the minority investors, the company had revised its offer earlier too. The company initial offer had valued Fortis Healthcare at Rs 5,003 crore.
According to the revised terms, Manipal Health Enterprises (MHEPL) has proposed to arrange financial assistance of up to Rs 750 crore by way of debt financing or guarantees to lenders of FHL.
Burman-Munjal family offices
On April 19th, Fortis received an improved binding offer from Hero and Burman family office. In an offer which is more ‘simple, attractive and faster to implement,’ the duo have sought to invest Rs 1,500 crore directly into Fortis, as compared to their earlier offer of Rs 1,250 crore.
Further, out of the total of Rs 1,500 crore, the parties have sought to invest Rs 750 crore upfront, Rs 500 crore via issue of preference shares and Rs 250 crore via warrants in Fortis.>