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Fortis bid won by Malaysia’s IHH Berhad, to invest Rs 4,000 cr

Fortis bid won by Malaysia’s IHH Berhad, to invest Rs 4,000 cr

Fortis HospitalNew Delhi : Fortis Healthcare on Friday said its board has unanimously accepted a binding offer from IHH Healthcare Berhad of Malaysia to invest Rs 4,000 crore in it by way of preferential allotment at Rs 170 per share.

Last week, Fortis said that its board has received binding bids from IHH and TPG-Manipal consortium under the new transaction process.

“The Board of Directors of Fortis Healthcare unanimously decided to recommend the binding investment proposal from IHH Healthcare Berhad to invest Rs 4,000 crore by way of preferential allotment at a price per share of Rs 170,” a company statement said here.

“The proposal provides for refinance of debt to the extent of Rs 2,500 crore.”

The funds infused would be used towards completing the acquisition of assets of the Singapore-listed RHT Health Trust, SRL private equity minority shareholders and short term liquidity needs, the statement added.

IHH will make “a mandatory open offer to the public shareholders of Fortis as per the SAST regulations at price which is higher than Rs 170 per share or price determined under SAST regulations for 26 per cent of the outstanding shares post issuance”.

According to Fortis, in approving the IHH offer, its board considered the merits of both the binding bids and took into account the recommendation of its financial advisors, Standard Chartered Bank and Arpwood Capital and legal advice.

Providing the rationale for the decision, the company said the offer from IHH was chosen after considering all key parameters.

The offer is at 20 per cent premium to the current market price.

“(IHH) offers significant deal certainty given a simpler transaction structure and requirement for fewer approvals and a shorter time-frame and exit opportunity for shareholders given the open offer, in case they desire,” Fortis said.

It also “offers potential to achieve scale driven synergies on operational and financing front and integrates Fortis into a large global healthcare platform with potential synergies”.

Fortis Healthcare Chairman Ravi Rajagopal said: “The IHH proposal offers a more strategically and financially compelling proposition along with simplicity and certainty.

“The process was relaunched on May 29 and has been conducted in a fair, time-bound and transparent manner.”

Following the launch of the new transaction process, Fortis had received bids of four suitors — Hero Enterprise Investment Office and Burman Family Office, IHH Healthcare Berhand, Radiant Life Care and TPG Asia and Manipal Health Enterprises.

However, the Hero Enterprise-Burman Family combine, which had earlier become the preferred bidder, and Radiant Life Care withdrew their bid offers.

—IANS

Fortis bid won by Malaysia’s IHH Berhad, to invest Rs 4,000 cr

Fortis says chose Munjal-Burman for certainty of funds, Manipal feels let-down

Fortis HospitalNew Delhi/ Gurugram : The decision by the Fortis Healthcare board to recommend the offer of the Hero and Burman Family consortium for sale of its business was primarily guided by the certainty of liquidity flowing in to enable greater efficiency, Fortis Director Brian Tempest said here on Friday.

However, other contenders expressed their disappointment over the same.

Following a board meeting here that lasted till late on Thursday, Fortis said its board had decided to recommend the offer of Hero Enterprise Investment Office-Burman Family Office to its shareholders.

“The Board, by a majority, decided to recommend the Hero-Burman Family offer to shareholders looking at the binding bids for the point of certainty of liquidity flowing into the company,” Tempest told reporters.

“After many months of engagement with Fortis, including due diligence, we are disappointed that the board has come to this conclusion. Manipal remains of the view that our offer proposed the most appropriate short and long-term plan for Fortis and was in the interests of all stakeholders, including shareholders,” Manipal Group’s CEO Ranjan Pai said in a statement on Friday.

“Our offer comprised a significant and necessary immediate investment, a clear strategic plan to fundamentally transform Fortis, as well as synergies from a combination with Manipal. It is now for shareholders to decide whether they will accept the board’s recommendation,” he added.

Earlier, Fortis’ Board had received offers from suitors such as Hero Enterprise Investment Office and the Burman Family Office, Fosun Health Holdings, IHH Healthcare Berhad, Manipal Hospital Enterprises and Radiant Life Care for infusion of funds.

“Hero-Dabur have 30-40 investments in healthcare, have one hospital, which has a nurses training college and another training hospital. To run this business efficiently, we’ll need a regular supply of nurses and doctors,” Tempest said.

According to Fortis, the entire exercise for selecting the Hero and Burman consortium involved a process that witnessed “deliberation and recommendation” by an independent Expert Advisory Committee (EAC).

“The Board considered the views of the EAC, financial and legal advisors, and following extensive discussions arrived at this decision,” the company said in a late night statement on Thursday.

The EAC comprised of Deepak Kapoor, former Chairman of PWC (India) and Lalit Bhasin, Chairman of the Indian Society of Law Firms, along with two financial advisors – Standard Chartered Bank and Arpwood Capital – while Cyril Amarchand Mangaldas were the legal advisors.

The deal envisages an infusion of Rs 800 crore via a “Preferential Allotment of Equity Shares at Rs 167 per share or as per SEBI ICDR guidelines whichever is higher…”.

It also encapsulates a “Preferential Issue of Warrants of Rs 1,000 crore at Rs 176 per share or as per SEBI ICDR guidelines whichever is higher.”

—IANS