IHH Healthcare Berhad has proposed a potential bid of as much as $1.3 billion for Fortis Healthcare Ltd. that tops an offer from a TPG-backed consortium, according to people with knowledge of the matter, opening a possible takeover battle for India’s second-largest hospital chain.
Asia’s largest hospital operator sent a letter to the Fortis board Wednesday saying it may be willing to pay as much as 160 rupees per share to acquire control of the Indian company, the people said, asking not to be identified because the information is private. It has asked the Fortis board for some time to update its due diligence before making a formal bid, the people said.
Kuala Lumpur-based IHH told the Fortis board it wants to work with them on a friendly offer, according to one of the people.
“A bidding war is a positive development,” said Nandita Agarwal Parker, managing partner at Karma Capital Management LLC, which holds a minority stake in Fortis. “The board will have to act quickly. Investors need to evaluate the bids in context of all of this and the strategic fit and value add.”
No final decisions have been made, and there’s no certainty IHH will proceed with a bid, the people said. A representative for IHH declined to comment, while a spokesman for Fortis said he couldn’t immediately comment.
Manipal’s controlling shareholder Ranjan Pai said in an interview Wednesday the reason he was not buying Fortis outright was because of the potential liabilities posed by the investigations. IHH is planning a cash offer for Fortis shares, people with knowledge of the matter said Wednesday. If the approach is rejected by the Fortis board, IHH will consider taking its offer directly to the Indian company’s shareholders, according to the people.
IHH had engaged in talks early last year to invest in Fortis, people with knowledge of the matter said at the time.
Article source: Bloomberg