BackFortis panel yet to reach consensus on winning bidder
The panel has to decide between the offers by Manipal-TPG, IHH Healthcare and an unnamed Sunil Munjal-led entity
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New Delhi: The expert advisory committee (EAC) meeting, which began at 8 am on Thursday to select the new owner of the beleaguered Fortis Healthcare Ltd, remained inconclusive even after 12 hours being spent on analysing three binding offers made for the Gurugram-based firm.
The meeting was continuing at the time of going to press. The EAC, headed by former PwC India chairman Deepak Kapoor, has to decide between the offers made by TPG-backed Manipal Hospitals, Malaysia’s IHH Healthcare and an unnamed Sunil Munjal-led entity.
EAC, set up by the Fortis board to evaluate the bids, is being advised by Fortis’ financial advisor Standard Chartered Bank, advisory firm Arpwood Capital Pvt. Ltd and law firm Cyril Amarchand Mangaldas.
The evaluation process outlined by the Fortis board mandates that EAC has to have an in-person meeting with bidders to understand the rationale and the justification of the offers made by all the parties that had submitted the binding bids.
Standard Chartered was expected to present its independent recommendations to EAC. The latter was then to form its own independent recommendation and subsequently submit its final recommendation to the board. This will be followed by bidders making an in-person representation to the board, which would also get an independent recommendations from Arpwood, SCB and EAC, will recommend to shareholders its final decision regarding the bid it feels is in the best interest of all shareholders.
Here’s what was on the table:
Manipal Health-TPG
TPG-backed Manipal Hospital on 6 May revised its offer to buy Fortis Healthcare, promising to infuse Rs2,100 crore at Rs175 per share, against an earlier proposal of Rs1,800 crore. Manipal also proposed merging with Fortis in a deal that would value the latter at Rs8,358 crore. It wants to buy stake in SRL Ltd held by PE firms at a price that values the subsidiary at Rs3,600 crore. The Ranjan Pai-led group does not require further due diligence and the proposal is binding and valid until 15 May.
IHH Healthcare Bhd
The Malaysian healthcare giant has asked for seven days to complete due diligence following its revised proposal to infuse Rs4,000 crore of which Rs650 crore is proposed to be infused immediately by way of a preferential issue and allotment of equity shares at Rs175 per share.
Munjal-Burmans offer
Sunil Munjal and Anand Burman, who own a minority stake in Fortis, have also offered to buy a stake in Fortis at Rs167 a share. They have committed to invest Rs1,800 crore in the healthcare chain without any due diligence.
The race to acquire the troubled healthcare operator started this March after founder brothers Malvinder Singh and Shivinder Singh stepped down from the board amid allegations of siphoning funds and mounting debts.
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