IHH upset by Fortis choice for hospital deal, to seek shareholders' support

IHH upset by Fortis choice for hospital deal, to seek shareholders' support”

"The Board, post having the detailed discussions on the pros and cons of each offer, decided by majority, to recommend the offer of Hero Enterprise Investment Office-Burman Family Office", the Fortis board said in a statement.

As per the offer, Hero Enterprise and Burman Family Office will invest Rs 800 crore upfront through an issue of preferential shares for Rs 167 each.

The board of directors of Fortis has made a decision to recommend the binding offer of the Hero and Munjal consortium.

Investors have been attracted to Fortis, which operates the largest chain of hospitals after leader Apollo Hospitals Enterprise Ltd. India has about half a hospital bed for every thousand people, according to the Organization for Economic Cooperation and Development, even as faster growth than many other large economies increases patients' ability to pay for better health care.

The marathon board meet, which has started early morning on Thursday and ended late in the night, witnessed much deliberation on all the binding offers for Fortis Healthcare made by IHH Healthcare, the Manipal/TPG consortium, Radiant Life Care and the Munjal-Burmans consortium. Fortis has set up an advisory committee to evaluate offers from suitors vying to acquire the company, or take a stake in it. The consortium will be investing around Rs 3,300 crore in the deal for FHL, of which Rs 2,100 crore will be invested in the company and Rs 1,200 crore will be used to buy the 30.93 per cent stake held by private equity firms in SRL Diagnostics. "Going forward, the immediate plan of action for the Company should be to build on its strengths, retain talent, expand business, and institutionalise processes at Fortis", said Anand Burman, Chairman of Dabur India. Their offer values Fortis at over Rs 9,000 crore, or roughly translates into Rs 172 per share.

When asked about the Fortis board's decision, Ranjan Pai, managing director and chief executive officer of Manipal Health Enterprises, said that he was disappointed. Its previous offer proposed a direct infusion of Rs 1,500 crore, so the new deal is significantly sweeter.

They have also sought three board seats in Fortis.

Starting from first hospital at Mohali in 200, Fortis Healthcare has grown to be a leading healthcare provider in India.

The consortium, which is the first to make a binding offer to Fortis, had initially valued the hospital business of the healthcare chain at Rs 5,003 crore in its offer on 27 March.

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