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Fortis receives ‘improved’ offers from IHH and Radiant (Lead)

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Fortis Healthcare (FHL) on Tuesday said that it has received two “improved” offers from IHH Healthcare Berhad and KKR-backed Radiant Life Care.

According to a late night BSE filing on Tuesday, the company said that its board has received a binding offer from Radiant to buy the healthcare major’s Mulund Hospital, without due diligence and “as a going concern at an enterprise value of Rs 1,200 crore”.

“This transaction would provide an immediate liquidity of Rs 680 crore for FHL (including proceeds from FHL’s 30.04 per cent stake in RHT, as we believe that RHT would divest Fortis Mulund assets at the appraisal value of Rs 683 crore…),” Radiant’s revised offer said.

“This offer presents immediate and guaranteed liquidity to FHL without any equity dilution of FHL’s shareholders.”

Besides its binding offer, the KKR-backed firm has also made an independent non-binding proposal.

Earlier in the day, the healthcare major said that it has received an “improved offer” from IHH Healthcare Berhad to directly invest in the company.

Accordingly, IHH made a binding offer, without the due diligence condition for an immediate investment of Rs 650 crore into the company “… by way of a preferential issue and allotment of equity shares at a price of Rs 160 per share for which IHH would be given the right to appoint two directors on board,” IHH Healthcare Berhad’s Managing Director and Group CEO Tan See Leng said in a letter to the Fortis board.

After the acceptance of its binding offer, IHH has asked for an immediate access to carry out legal and financial due diligence of the company. The non-binding aspect of the overall proposal is to invest Rs 3,350 crore with due diligence and other conditions.

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The new offers were made a day after the company said that Hero Enterprise Investment Office and the Burman Family Office have extended the validity of their “improved binding offer” till May 4, 2018.

On April 19, Sunil Kant Munjal of Hero Enterprise as well as Anand Burman and Mohit Burman of the Burman family approached the Board of Fortis Healthcare with a binding offer to invest Rs 1,500 crore directly in the company.

In addition to Hero Enterprise Investment Office and the Burman Family Office’s proposal, Fortis Healthcare has received “an unsolicited non-binding” EoI from Fosun Health Holdings for a possible due diligence.

On the hindsight, the company had on March 27 announced its plans to demerge its hospitals business (Fortis Hospitals) into Manipal Hospital Enterprises Private Ltd (Manipal Hospitals).

The plan envisages the sale of the company’s 20 per cent stake in SRL Ltd to Manipal Hospitals.

However, on last Thursday, Fortis Healthcare decided to constitute an “expert advisory committee” to evaluate all binding proposals for fund infusion. The panel is led by Deepak Kapoor, Former Chairman and CEO of Price Waterhouse Coopers, India and has been “requested to provide a report of its recommendation to the Board, by April 26, 2018”.

The company has named Renuka Ramnath and Lalit Bhasin as members of an “expert advisory committee”. Ramnath is a former MD and CEO of ICICI Venture and Bhasin, President, Society of Indian Law Firms and Managing Partner, Bhasin & Co.

The panel is likely to meet by April 25 to decide on the merger or buy offers.

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