Published: Mon, April 16, 2018
Sci-tech | By Brandy Patterson

IHH plans rival bid for India's Fortis Healthcare

IHH plans rival bid for India's Fortis Healthcare

IHH's offer surpasses the revised bid of Rs 155 per share by Manipal Hospital Enterprises Pvt.

IHH, one of Asia's largest healthcare operators, has been scouting acquisitions to grow in India, where it has said before that it expects a spike in demand for private healthcare.

The company also shared a letter sent to the board by the Malaysian healthcare major, which offered up to Rs 160 per share of Fortis.

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In the IHH letter, which Fortis made public, the former said it was making the offer due to the "inability of the statutory auditors of (Fortis) to opine on its financial position as at December 31, 2017, and regulatory investigations that are now underway".

"As part of the proposal, IHH will work with the board and the management of the company to identify optimal financing solutions to enable the company to fulfil its commitments during the challenging phase and stay afloat", the proposal said. It has asked the Fortis board for some time to update its due diligence before making a formal bid for the company in which group entities of Hero Enterprise Investment Office led by Sunil Kant Munjal and the Burman family of the Dabur Group hold around 3 per cent stake.

According to their offer, the allotment and pricing would be in accordance with SEBI guidelines for preferential shares or ₹ 156 per share, whichever is higher.

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The rest Rs 750 crore shall given after due diligence subject to the satisfaction of the investors which will be completed in three weeks, the letter added.

Shares of FORTIS HEALTHCARE LTD. was last trading in BSE at Rs.151.95 as compared to the previous close of Rs. 153.8.

They are entering the fray as founders Malvinder Singh and Shivinder Singh were unable to repay loans and lost Fortis shares put up as collateral.

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Commenting on the implementation agreement FHL has got into with MHEL and TPG Capital, IHH noted that the transaction involved various complex steps over a prolonged period. Ranjan Pai, chairman, Manipal Education and Medical Group, in an interview to VCCircle had said that given the complexity of the deal structure, the relative valuation has not been properly understood.

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