IHH offers Rs 160 per share for Fortis healthcare

New Delhi: Malaysia's IHH Healthcare has joined the race to acquire India's troubled Fortis Healthcare, offering to acquire shares at up to Rs 160 apiece, higher than Manipal Health Enterprises' offer of Rs 155 per unit by valuing the company at Rs 6,061 crore.

Yesterday, Sunil Kant Munjal-led Hero Enterprise Investment Office and Burman Family Office had also offered to invest Rs 1,250 crore in the healthcare chain at up to Rs 156 per share.

Read also: Founders of Dabur, Hero jointly bid Rs 1,250 crore for Fortis

Manipal Health Enterprises had raised its offer for Fortis Healthcare Ltd to Rs 155 per share by valuing the hospital business higher at Rs 6,061 crore, from an initial total equity valuation of Rs 5,003 crore.

In a regulatory filing today, Fortis Healthcare Ltd (FHL) said it has received an unsolicited non-binding expression of interest from IHH Healthcare Berhad for possible due diligence and participation with the company.

The company also shared a letter sent to the board by the Malaysian healthcare major, which offered up to Rs 160 per share of Fortis.

In the letter to the directors of FHL, IHH Healthcare Berhard Managing Director and Group CEO Tan See Leng expressed his company's "strong interest in Fortis Healthcare Ltd and its affiliates in a suitable manner".

"As on date, based on publicly-available information and our preliminary analysis, we believe a price of up to Rs 160 per Fortis share to be appropriate, subject to satisfactory completion of a due diligence," he said.

While seeking a due diligence of Fortis on its financial position of up to December 2017, Leng said Fortis' recent agreement with Manipal Healthcare and TPG Capital for a transaction involved various complex steps over a prolonged period.

"We believe that we could provide an alternative transaction construct, which in our view, would offer a better option to the company's shareholders at an attractive valuation," he added.

Stating that Fortis Healthcare faces several issues which pose significant challenges and need to be swiftly addressed, he said, "At this critical juncture, the company needs a visionary strategic partner with significant operational expertise and sufficient balance sheet strength to navigate troubled water and steer the company in the right direction."

As part of the proposal, Leng said, "IHH will work with the board and the management of the company to identify optimal financing solutions to enable the company to fulfill its commitments during this challenging phase and stay afloat."

Separately, given the inability of the auditors of FHL to conclude or sign off financial results, IHH will also assist in conducting independent investigations, Leng added.

"IHH believes this will enable the company to rebuild trust with stakeholders and move ahead with renewed strength, towards a new growth phase," he said.

Stressing that its offer is non-binding, IHH asked the Fortis board to respond on its offer by 1700 hours, April 18.

Leng also hinted at the possibility of IHH making a revised counter offer if the other suitors were to revise their bids.

"Notwithstanding anything in this letter, given the ever-changing competitive dynamics, IHH reserves the right to pursue all necessary steps to ensure that the shareholders of Fortis are provided with the opportunity to realise the value inherent in our proposal including the right to revise the indicative offer price in any manner, IHH deems fit," he said in the letter.

In March, Fortis Healthcare Ltd. (FHL) board had approved demerger of its hospital business, which was to be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 percent stake in diagnostics chain SRL Ltd, in an Rs 3,900-crore deal.