IHH and Manipal-TPG submit new bids for Fortis, Munjal-Burmans exit

As the deadline of submitting the fresh binding bid for Fortis Healthcare expired on Tuesday, only two of the four interested parties — Malaysia’s IHH Healthcare and Manipal-TPG combine

A Fortis hospital building is pictured in Gurgaon. (File photo | Reuters)

NEW DELHI: As the deadline of submitting the fresh binding bid for Fortis Healthcare expired on Tuesday, only two of the four interested parties — Malaysia’s IHH Healthcare and Manipal-TPG combine have made fresh binding bids for beleaguered healthcare chain. Munjal-Burmans combine, which won the five-way bid last time is said to have backed out from the race. The group did not confirm the reports of their exit or the reasons behind it, but a source said that the group has not submitted any fresh bid on the last day. Submission of bid by the fourth interested party — KKR-backed Radiant Life has neither been confirmed nor denied.

IHH, without disclosing the valuation details, said that the binding offer supersedes and replaces its earlier enhanced revised proposal. Last time, it had made an offer to invest Rs 4,000 crore in total which valued the company at Rs175 per share. Out of Rs 4,000 crore, it proposed to invest Rs 650 crore upfront without due diligence. Sources in Manipal-TPG consortium also confirmed submitting bids for Fortis Healthcare, details of which are not made public yet.

The group had emerged the highest bidder last time by offering to invest Rs 2,100 crore upfront as part of the deal, which valued Fortis at `180 per share. The Munjal-Burmans combination’s last offer was to invest Rs 1,800 crore upfront through a preferential allotment of equity shares and warrants, which values at Rs175 per share. However, post getting approval from the previous board, the duo’s offer for the healthcare chain
was terminated amidst strong pressure coming from shareholders.

The reports of their exit from the race also come days after Fortis announced that it has initiated legal action to recover about Rs 500 crore of funds given as inter-corporate deposits (ICDs) without board approval to the firms controlled by erstwhile promoters Malvinder and Shivinder Singh.

Even though the details of fresh binding bids are not known, it is expected to be in line with new conditions laid down by the reconstituted board members which said put conditions like minimum investment of Rs 1,500 crore by way of preferential allotment, detailed funding plan for the acquisition of RHT Health Trust (RHT), a plan for providing exit to private equity investors of diagnostic arm SRL etc.
The acquisition of cash-strapped Fortis, which recently posted a net loss to Rs 914.32 crore for the fourth quarter ended March 2018, continues to see new turns and twist since its board had in March had approved Manipal Hospitals and TPG Capital to acquire the healthcare chain in a Rs 3,900 crore deal.

Fresh bids for Fortis

■ Malaysia’s IHH Healthcare and Manipal-TPG combine have put in fresh binding bids for Fortis healthcare
■ In a regulatory filing, Fortis Healthcare said it has fresh binding bids without specifying details
■ The Munjal-Burman combine has, however, not submitted fresh binding bids on the last day
■ The binding bids will be evaluated by the board in consultation with its advisors