Home >Companies >Fortis sale process is likely to begin again

New Delhi:The consortium led by Hero Enterprise chairman Sunil Munjal and Dabur India Ltd chairman Anand Burman has given its consent to reopen the bidding process for sale of troubled 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 of the board by shareholders.

Munjal and Burman told Fortis that they provided their consent for the company to re-open the bidding process so that the company can “expeditiously" finalize and close its fund-raising so that its business does not suffer any further.

“Needless to say, we expect that any such process will be run in a fair and transparent manner, with full clarity to all stakeholders and bidders regarding the criteria and objectives that will be considered relevant by the company for this purpose, and with equal information being available to all bidders," they said.

In a letter to the board, Munjal and Burman expressed their “deep anguish and regret" and said “it appears that there may be indecision on the part of the company regarding the bid process, which we understand could be on account of a few shareholders indicating their preference to the company for re-opening of the bid process".

Fortis Healthcare, however, did not clarify whether it will re-open the bidding process.

The move follows reconstitution of the Fortis board last week and requests by some of the Fortis shareholders to reconsider other offers for the company.

On 22 May, Fortis Healthcare shareholders approved a resolution to remove its director Brian Tempest from the board and appoint three new directors, indicating that they were not happy with the ongoing sale process.

An extraordinary general meeting of the shareholders of the hospital operator was held to vote on the removal of its four directors.

Three of the four directors—Lt Gen Tejinder Singh Shergill, Harpal Singh and Sabina Vaisoha—had already resigned. Only Tempest, the fourth director, continued to be on the board at the time of voting.

Significantly, all four had voted in favour of the offer by Sunil Munjal’s Hero Enterprises Investment Office and the Burman family office, whose bid for investing Rs1,800 crore was approved by the board.

The extraordinary general meeting was sought by minority shareholders Eastbridge Capital and Jupiter India, which together control about 12% of the company, and had called for the removal of the four directors, alleging that they had failed to work in the interest of all of Fortis’s shareholders.

The hospital chain has received five offers from local and international suitors wanting to invest in the firm or buy it. Its immediate need for liquidity forced the board to ask for only binding offers and prefer bidders who would avoid a due diligence—a decision that many thought has been taken in haste.

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