Promoters of Hero Group and Dabur India have submitted a joint bid to acquire a significant stake in Fortis Healthcare intensifying the battle for the control of group's hospitals and diagnostic business.Promoters of Hero Group and Dabur India have submitted a joint bid to acquire a significant stake in Fortis Healthcare intensifying the battle for the control of group's hospitals and diagnostic business.
Sunil Kant Munjal of Hero Enterprise and the Burman Family Office, which own around 3 per cent stake in Fortis Healthcare, have proposed to invest Rs 12.50 billion in the company in two tranches.
This infusion, they said, will help in addressing urgent financial needs of the company, which is said to have only Rs 700 million of liquid cash.
Based on today's closing price (Rs 153.80) and the current market cap (Rs 79.76 billion) the infusion will give Munjal and Burman group entities an additional 15.6 per cent stake in Fortis Healthcare.
The surprise public announcement for stake purchase comes amidst tussle between Manipal Hospitals and Malaysia-headquartered IHH for Fortis healthcare assets.
As part of the offer, Munjals and Burmans have proposed to invest Rs 5 billion immediately through preferential allotment of shares and additional Rs 7.5 billion post completion of due diligence in three weeks.
Fortis Healthcare notified the stock exchange it was evaluating the unsolicited binding offer.
“Our offer is in the best interest of Fortis Healthcare. In fact, all those connected with the company’s ecosystem, its shareholders, patients, their attendants, the community and public at large, in addition to the lenders, suppliers, doctors, medical and non-medical staff will benefit from it. We are investing in the company and our aim is to create value for all stakeholders,” Munjal said in an offer letter to the board.“Our offer does not envisage any changes in the current structure, operations and assets of the company and is simple and is almost immediately implementable,” said Anand Burman, non-executive chairperson of Dabur India.
The Munjal family first expressed interest in merger & acquisition transaction with Fortis Hospitals last July but discussions remained futile. The two families approached Fortis Hospital again last Month for fund infusion. As per the proposal, the funds infused by the families shall be used for paying dues and employee salaries. The groups have also sought one board position.
Over several months, a host of private equity firms and hospital chains have been on the lookout to acquire control of Fortis. Last month, Fortis and Manipal Hospitals announced a merger, thereby creating the largest provider in India of healthcare services by revenue.
It ran into rough weather, with financial investors and hedge funds protesting at the valuation offered for the Fortis group's hospital business in the deal. On Tuesday, Manipal revised the terms with a valuation of Rs155 a share.
IHH Healthcare Berhad, the world’s second largest healthcare group, has entered the context to acquire control of Fortis Hospitals. It has increased the price earlier offered by Manipal Hospitals.
IHH gave a non-binding offer to the board of Fortis Healthcare on Wednesday, at a valuation of RsRs 160 a share for its hospital and diagnostic business. IHH has sought time from Fortis management to update its due-dilligence.Sources said IHH was doing due-dilligence with Fortis for nine months and working closely with the company. "It is surprising that they have made a non-binding offer at this stage and one which says it values Fortis shares at up to Rs160 a piece. TPG-backed Manipal has made a binding bid," said a source. He added that it only shows a lack of conviction from their side that after eyeing Fortis for the past 18 months, they have not placed a binding bid even after TPG-Manipal revised their offer.
Sunil Kant Munjal of Hero Enterprise and the Burman Family Office, which own around 3 per cent stake in Fortis Healthcare, have proposed to invest Rs 12.50 billion in the company in two tranches.
This infusion, they said, will help in addressing urgent financial needs of the company, which is said to have only Rs 700 million of liquid cash.
Based on today's closing price (Rs 153.80) and the current market cap (Rs 79.76 billion) the infusion will give Munjal and Burman group entities an additional 15.6 per cent stake in Fortis Healthcare.
The surprise public announcement for stake purchase comes amidst tussle between Manipal Hospitals and Malaysia-headquartered IHH for Fortis healthcare assets.
As part of the offer, Munjals and Burmans have proposed to invest Rs 5 billion immediately through preferential allotment of shares and additional Rs 7.5 billion post completion of due diligence in three weeks.
Fortis Healthcare notified the stock exchange it was evaluating the unsolicited binding offer.
“Our offer is in the best interest of Fortis Healthcare. In fact, all those connected with the company’s ecosystem, its shareholders, patients, their attendants, the community and public at large, in addition to the lenders, suppliers, doctors, medical and non-medical staff will benefit from it. We are investing in the company and our aim is to create value for all stakeholders,” Munjal said in an offer letter to the board.“Our offer does not envisage any changes in the current structure, operations and assets of the company and is simple and is almost immediately implementable,” said Anand Burman, non-executive chairperson of Dabur India.
The Munjal family first expressed interest in merger & acquisition transaction with Fortis Hospitals last July but discussions remained futile. The two families approached Fortis Hospital again last Month for fund infusion. As per the proposal, the funds infused by the families shall be used for paying dues and employee salaries. The groups have also sought one board position.
Over several months, a host of private equity firms and hospital chains have been on the lookout to acquire control of Fortis. Last month, Fortis and Manipal Hospitals announced a merger, thereby creating the largest provider in India of healthcare services by revenue.
It ran into rough weather, with financial investors and hedge funds protesting at the valuation offered for the Fortis group's hospital business in the deal. On Tuesday, Manipal revised the terms with a valuation of Rs155 a share.
IHH Healthcare Berhad, the world’s second largest healthcare group, has entered the context to acquire control of Fortis Hospitals. It has increased the price earlier offered by Manipal Hospitals.
IHH gave a non-binding offer to the board of Fortis Healthcare on Wednesday, at a valuation of RsRs 160 a share for its hospital and diagnostic business. IHH has sought time from Fortis management to update its due-dilligence.Sources said IHH was doing due-dilligence with Fortis for nine months and working closely with the company. "It is surprising that they have made a non-binding offer at this stage and one which says it values Fortis shares at up to Rs160 a piece. TPG-backed Manipal has made a binding bid," said a source. He added that it only shows a lack of conviction from their side that after eyeing Fortis for the past 18 months, they have not placed a binding bid even after TPG-Manipal revised their offer.
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