If you have four serious bidders trying to acquire your company, you would expect a pot of gold at the end of the bidding war. Fortis Healthcare Ltd’s minority investors instead are continuing to have a torrid time with their investments. The company’s board has settled on an offer, which from the looks of it isn’t the most lucrative. They settled on the offer from the Hero-Burman group, citing it met their criteria on certainty (on completion of the deal) and liquidity issues.

Investors weren’t impressed. Fortis shares fell 2.7% on Friday, and are down 7% this year. Analysts say that the higher offer made by IHH Healthcare and their expertise in the healthcare business had made them look like front runners.

Hetal Dalal, chief operating officer at proxy firm Institutional Investor Advisory Services, says that the management could have handled the entire process in a better manner. “This is certainly not the best deal financially and neither is it the best strategic fit. Having said so, all three offers were fairly comparable, each with their pros and cons," he adds.

If (and that’s a big if) shareholders give their nod, the Hero-Burman consortium will infuse Rs1,050 crore upfront. This can help ease Fortis’s liquidity constraints. Because of the uncertainty on how shareholders will respond, most brokerages have refrained from putting out notes on the development. On the condition of anonymity, an analyst said the board should have insisted on an independent due diligence exercise. That would have given better clarity about Fortis to potential investors and to the public at large. Nevertheless, the board has set the resolution process in motion. Fortis will now get an anchor and investors can look forward to revival measures. But the gains can be slow to come by. The offer price is not significantly higher than the current market price of the stock.

However, Fortis does have potential, though much depends on how successful the new investor will be at value-unlocking and regaining the business momentum.

The initial Hero-Burman plan envisages sale of the SRL Diagnostics and using the proceeds to fund the purchase of the asset holding company RHT Health Trust, a Singapore-based REIT (real estate investment trust). With a relatively smaller diagnostic chain commanding a market capitalization of Rs6,800 crore, SRL with higher revenues and larger presence should claim better valuation, says an analyst.

Still, given the current troubles at the company and concerns about corporate governance, it has to be seen if Fortis can realize a good value for its stake.

In the event of a delay in sale of SRL, the Hero-Burman initial plan envisages a rights issue and using the proceeds to acquire the asset holding company. But it can be a long-drawn process and much of the Fortis’s earnings in the meantime will continue to be undermined by the asset holding company RHT Health Trust. According to Haitong Securities, the high payouts to the RHT Trust have been crimping Fortis earnings and weighing on valuations. So if the current arrangement continues, Fortis earnings can remain suppressed.

The second set of challenges emanate from the core business. According to an analyst with a domestic broking firm, Fortis has lost substantial ground amid the turbulence at the company. While sorting out the business structure is one part of the job for its new owners, rebuilding the business is another key task, the analyst says. The company has to sort out liquidity problems and chalk out a plan to regain its customers and employees’ confidence. Only then can the company’s value-unlocking measures create durable benefits for the shareholders.