Fortis board to take call on Manipal Health, IHH and Hero-Dabur’s offers this week

Fortis Healthcare on Monday said its board will meet this week to look at all eligible options as two more parties have entered the fray to acquire the company after its pact with Manipal Health Enterprises. The company’s statement comes hours after Malaysia’s IHH Healthcare said Fortis has expressed inability to engage with it over its offer to acquire the Indian healthcare firm, citing binding agreements with Manipal Health Enterprises.

IHH had last week joined the race to acquire Fortis Healthcare, offering to acquire its shares at up to Rs 160 apiece, higher than Manipal’s offer at Rs 155 per share which valued the company at Rs 6,061 crore.

The Malaysian firm’s offer came a day after Sunil Kant Munjal-led Hero Enterprise Investment Office and Burman Family Office offered to invest Rs 1,250 crore in Fortis at up to Rs 156 per share. The Fortis Board will be meeting this week to look at all eligible options and determine the future course of action that is in the best interests of the company, employees and shareholders, Fortis Healthcare said in a statement.

Last week, Fortis has received two binding offers — one is a revised offer from Manipal Health Enterprises Pvt Ltd (MHEPL) and the second is a joint binding offer from Hero Enterprise Investment Office and Burman Family Office expressing interest in the company, it added.

In addition, the company has also received a non-binding expression of interest from IHH Healthcare Bhd, the statement said. Manipal had raised its offer for Fortis to Rs 155 per share by valuing the hospital business higher at Rs 6,061 crore, from Rs 5,003 crore initially.

In the letter to the directors of FHL last week, IHH Healthcare Berhard Managing Director and Group CEO Tan See Leng expressed his company’s strong interest in Fortis Healthcare Ltd and its affiliates in a suitable manner. Earlier in the day, in a filing on Malaysian stock exchange IHH said, in response to the letter, the Board of Fortis has indicated its inability to engage with IHH as Fortis has entered into binding agreements with Manipal Health Enterprises Pvt Ltd, Manipal Global Health Services and TPG Asia.

The company further said, at this juncture, IHH has not entered into any discussions, negotiations or transactions. A merger with a hospital chain such as Manipal might make more sense, said an analyst, adding that more details of the IHH offer were needed.

IHH operates healthcare facilities across nine countries via a network of 49 hospitals including Mount Elizabeth and Gleneagles in Singapore.

In the letter last week, Leng had said: As on date, based on publicly-available information and our preliminary analysis, we believe a price of up to Rs 160 per Fortis share to be appropriate, subject to satisfactory completion of a due diligence. Leng also hinted at the possibility of IHH making revised counter offer if the other suitors were to revise their bids.

Notwithstanding anything in this letter, given the ever changing competitive dynamics, IHH reserves the right to pursue all necessary steps to ensure that the shareholders of Fortis are provided with the opportunity to realise the value inherent in our proposal including the right to revise the indicative offer price in any manner, IHH deems fit, he said in the letter.

In March, the Fortis board had approved demerger of its hospitals business, which was to be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 per cent stake in diagnostics chain SRL Ltd, in a Rs 3,900-crore deal. Shares of Fortis fell about 2 per cent on Monday after the announcement by IHH and ended 2.8 per cent lower. IHH shares ended down 0.33 per cent after trading was halted.businesstoday

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