Fortis Healthcare has invited the Hero-Burman group, a consortium of TPG Capital and Manipal Group, and Malaysia's IHH Healthcare Bhd to participate in the bidding process
New Delhi: The board of Fortis Healthcare Ltd reopened the bidding process for the troubled hospital chain and invited the Munjal-Burman combine, TPG-backed Manipal Health Private Enterprises Ltd, and IHH Healthcare Bhd to participate. All three bidders had submitted binding offers last time.
“Consequently, the Munjal-Burman combine’s offer, that the previous Fortis board had recommended, now stands terminated," Fortis said in an exchange filing on Tuesday about the bid that had been accepted by the board on 10 May 2018.
In addition to the three “invited bidders", other interested parties can also participate in the second round of bids.
All expressions of interest must be submitted by 5pm on 31 May and the board will shortlist “other bidders" and inform them of its decision by 1 June, the filing said. All bidders will then get 10 days for financial and legal due diligence and can interact with the management and advisors who have conducted vendor due diligence for Fortis.
The board of Fortis has asked the bidders to have minimum features such as minimum investment of Rs1,500 crore into Fortis by way of preferential allotment, plan for funding of RHT acquisition with long stop date of 30 September 2018, a plan for providing exit to private equity investors of SRL, unconditional bids except for the regulatory/legal/shareholder approvals, sources of funds to finance the transaction, including firm commitment letters from lenders and plans for retention of current management and employees.
The announcement comes a day after the consortium led by Hero Enterprise chairman Sunil Munjal and Dabur India Ltd chairman Anand Burman gave its consent to reopen the bidding process for sale of the cash-starved Fortis Healthcare Ltd.
The consortium’s offer to buy Fortis was selected by the erstwhile board, of which three members resigned and the fourth, the company’s chairman Brian Tempest, was voted out by shareholders.
The EGM was sought by a group of minority shareholders—Eastbridge Capital and Jupiter India—which together control about 12% of the company. They alleged the directors had failed to work in the interest of all shareholders, particularly in the way they handled offers for the cash-starved hospital chain.
The Malaysian healthcare chain IHH is among four suitors for Fortis, the others being businessmen Sunil Munjal and Anand Burman, who have submitted a joint bid, TPG Capital-backed Manipal Health and KKR-backed Radiant Life Care.