Fortis board to meet on Thursday, mull ‘all eligible options’
17 Apr 2018
Fortis Healthcare on Monday said its board will meet this week to look at all eligible options as two more parties have entered the fray to acquire the company after its pact with the Manipal Health Enterprises-TPG consortium.
The company's statement came hours after Malaysia's IHH Healthcare said Fortis has expressed inability to engage with it over its offer to acquire the Indian healthcare firm, citing binding agreements with Manipal Health Enterprises (See: IHH out of race for Fortis as board refuses to weigh offer).
On the other hand, Fortis Healthcare stated that "the Board of Directors of the Company have not yet made a decision".
IHH had last week joined the race to acquire Fortis Healthcare, offering to acquire its shares at up to Rs160 apiece, higher than Manipal's offer at Rs155 per share which valued the company at Rs6,061 crore.
In the last one week, Gurugram-based hospital chain received three offers - a revised offer from MHE, a joint bid from Hero Enterprise Investment Office-Burman Family Office, and a non-binding expression of interest from IHH Healthcare.
The Fortis Board will be meeting on Thursday to look at all eligible options and determine the future course of action that is in the best interests of the company, employees and shareholders, the Fortis Healthcare statement said.
A source told DNA Money that Fortis Healthcare has dismissed the Malaysian offer and the company is only delaying an announcement in order to eventually state that Manipal-TPG offer is best suited for all the stakeholders.
"As Fortis Healthcare has signed a binding agreement, it is under legal constraint," said the source.
Last week, Fortis has received two binding offers -- one is a revised offer from Manipal Health Enterprises Pvt Ltd (MHEPL) and the second is a joint binding offer from Hero Enterprise Investment Office and Burman Family Office expressing interest in the company, it added.
Meanwhile, proxy advisory firm Institutional Investor Advisory Services (IiAS) has stated that Fortis Healthcare shareholders need an objective and independent decision-making body to advise its board on the company's sale.
As reported by PTI, all the three options have different consequences for the future of Fortis and taking the right call will now be crucial.
IiAS believes the current board can get additional support in assessing the three bids and come to a decision on the complex sets of pulls and pressures without waiting for board expansion.
As per the report, "Shareholders need a decision-making body that is objective, independent, and has a historical association with the promoter group or their companies."
In the letter to the directors of FHL last week, IHH Healthcare Berhard managing director and group CEO Tan See Leng expressed his company's strong interest in Fortis Healthcare Ltd and its affiliates.
But at this juncture, IHH has not entered into any discussions, negotiations or transactions, the company said.
IHH operates healthcare facilities across nine countries via a network of 49 hospitals, including Mount Elizabeth and Gleneagles in Singapore.
In March, the Fortis board had approved demerger of its hospitals business, which was to be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 per cent stake in diagnostics chain SRL Ltd in a Rs3,900-crore deal.