Battle for Fortis Healthcare: Manipal Health Enterprises-TPG Capital make final offer

The battle for Fortis Healthcare may have seen the last bid with Manipal Health Enterprises-TPG Capital consortium making its final offer on Sunday. In its latest offer, MHE-TPG will infuse Rs 2,100 crore by subscribing to equity shares of Fortis at Rs 160 per share. The offer values Fortis at Rs 8,358 crore, about Rs 2,036 crore more than its earlier offer. In its earlier bids, MHE-TPG had valued the Gurugram-based hospital chain at Rs 6,322 crore, Rs 6,061 crore and Rs 5,003 crore. It also proposes to buy stake in SRL held by private equity firms at a price that values the subsidiary at Rs 3,600 crore. The SRL Board would be restructured so as to ensure that no member of the promoter group of Fortis Healthcare is part of it.

MHE-TPG doesn’t want any further due diligence, and the proposal is binding and valid until May 15. Five companies and investment groups are vying for FOrtis which runs about 30-odd hospitals in India. The Fortis Board would meet on May 10 to decide on the bids and the advisory panel. In a relief to the existing Fortis management, the shareholders endorsed it by clearing the appointment of Lt Gen (retd) Tejinder Singh Shergill as an ‘independent director’ of the company. He received 54.18% votes, while the most opposition came from “public institutions”.

The shareholders of Fortis also approved the acquisition of RHT Health Trust assets with 98.33% voting in favour.

Earlier, East Bridge Capital and Jupiter India Fund had demanded the removal of existing directors from the Board, apart from conducting an extraordinary general meeting.

The Gurugram-based hospital’s management had allowed the MHE- TPG consortium to come up with a better offer until then.

On May 1, Malaysian IHH Healthcare Berhad and Hero Enterprise Investment Office-Burman Family Office had sweetened their offers for Fortis by proposing an investment of Rs 4,375 crore at a price of Rs 175 per share. While Munjal-Burman has offered Rs 1,800 crore (without any due diligence) for three Board seats, up from their earlier Rs 1,500 crore for two seats.

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Munjal-Burman is ready to invest Rs 1,050 crore upfront while the balance Rs 750 crore will be infused over the next four months.

Source: DNA Money