Fortis healthcare confirmed in a late night stock exchange filing on Tuesday that hong kong stock exchange-listed Fosun had made an ‘unsolicited’ non-binding expression of interest for the company, through its wholly-owned subsidiary Fosun Health Holdings.
Fosun has offered to invest upto $350 million in the hospital chain provided it is given a three week timeframe to conduct due diligence on the company. It also said it was willing to make a preliminary investment of Rs. 100 crore in the company through a convertible debt instrument, according to the stock exchange filing.
Fosun has offered to subscribe to fresh shares in fortis healthcare at a price of Rs. 156 per share and said its investment would cap its shareholding in the company at below 25%.
Fosun has assets of $75 billion and an existing investment in India’s Gland Pharma, which it purchased from US buyout giant KKR. The company has invested over $1 billion in India and has been aggressively scouting for assets across sectors.
It was also amongst bidders vying for a stake in billionaire Rahul Bhatia controlled Interglobe group’s travel technology arm.
Fortis healthcare’s board earlier rejected an offer from Malaysia’s IHH healthcare. It “indicated its inability to engage” with the Malaysian firm due to its agreement with Manipal Health Enterprises Pvt Ltd, Manipal Global Health Services and TPG Asia, IHH told Malaysian stock exchange Bursa Malaysia Securities Berhad in a filing.
As part of its offer, IHH proposed a price of Rs160 for each share of Fortis Healthcare, subject to satisfactory completion of limited due diligence.
Fortis also received a joint offer from Sunil Munjal’s Hero Enterprise Investment Office and the family office of the Burmans of Dabur to infuse around Rs 1,250 crore into Fortis and keep its existing structure intact.
On March 27, the Fortis board approved a proposal to demerge its hospital business into Manipal as well as the sale of its 20% stake in SRL Ltd, Fortis’ diagnostics business, to the Ranjan Pai-promoted hospital group, “subject to shareholders and regulatory approvals”, a Fortis spokesperson said.
Following word of potential opposition from minority shareholders disappointed with the valuation given to Fortis in the deal, Manipal-TPG submitted a revised offer last week that increased the valuation of Fortis’ hospital portfolio by around 21%, according to analyst estimates. It values Fortis at Rs 155 per share, ET reported last week.
Over the last three weeks, Fortis’ board has been under increased scrutiny of minority and institutional shareholders, with shareholders like Rakesh Jhunjhunwala questioning its sanctity and asking a fairer process be followed in its sale.
Fortis, meanwhile informed the stock exchanges Monday that its board had not yet made a decision on the proposals it had received so far and proposed to meet on April 19 ‘to consider all options’.
A hostile takeover bid from IHH healthcare wasn’t ruled out by multiple sources aware.