NEW DELHI: Sunil Munjal of Hero Enterprises and the Burman family, promoters of Dabur, have entered the bidding war to acquire Fortis Healthcare’s hospital and diagnostics business. Munjal’s family office and the Burman family office are jointly launching a bid of their own even as Manipal Health Enterprises, according to a new filing on the Bombay Stock Exchange.
Fortis Healthcare Limited has received an unsolicited binding offer from Hero Enterprise Investment Office (Munjals) and the Burman Family Office with a proposal to invest Rs 1,250 crore into the company through preferential allotment route, Fortis told BSE late on Thursday. This means a Rs 500 crore binding offer immediately and Rs 750 crore post diligence that is to be completed “within three weeks”, the notification added.
“The said proposal is under evaluation by the Company and we will keep the stock exchanges informed accordingly,” Fortis stated.
This comes even as Manipal Health Enterprises has increased its offer to acquire Fortis’ hospitals business and while Malaysian healthcare group IHH Healthcare Bhd has also been planning a counter bid of its own.
Burman Family Holdings, the investment arm of the Burman family, promoters of consumer goods major Dabur India, has Interests across financial services, healthcare and technology, insurance as well as hospitality, with franchisee rights for Yum Restaurants owned Mexican-theme restaurant chain Taco Bell.
Fortis Healthcare Ltd has been a hot acquisition target despite ongoing investigations by bodies like the Securities and Exchange Board of India and the Serious Fraud Investigations Office.
Talks for sale of the erstwhile promoter’s stake in Fortis were on since 2016. While the promoter and promoter group now owns less than 1% in the healthcare group now from 34.43% in December 2017 because they were unable to recover shares pledged to banks, bidders like Ranjan Pai-promoted Manipal Health Enterprises and IHH Healthcare Bhd have moved in with offers.
On March 27, Fortis had told the Bombay Stock Exchange that its board of directors had approved a proposal to sell its hospital and diagnostics business, SRL diagnostics, to a consortium of Manipal and PE firm TPG.
The deal, initially valued at Rs 3,900-crore, involves the company hiving off its hospital business and merging it with the Manipal Hospitals. The second leg of the transaction involved the purchase of a significant stake in SRL.
Following disappointment and reports of potential opposition from minority shareholders to the terms, Manipal-TPG this week submitted a revised bid to sweeten the deal. The revised offer, which proposed a swap ratio of 13.1 shares in the new merged entity (MHEPL) for every 100 shares of Fortis, is currently being evaluated by Fortis’ board, according to a BSE filing dated April 10.
The old swap ratio offered 10.83 shares of MHEPL for every 100 Fortis shares, upsetting minority shareholders who felt the deal was undervaluing Fortis.
Ace investor Rakesh Jhunjhunwala had earlier questioned the proposed deal with Manipal-TPG in an exclusive interview to ET, adding that the hospital chain should be sold through a “fair” process that allows all interested parties to bid.
ET reported on Thursday that IHH, Southeast Asia’s largest hospital operator, was also sending a formal proposal to the board of Fortis expressing its interest and seek a meeting with the board to take matters forward.