IHH out of race for Fortis as board refuses to weigh offer

The IHH announcement indicates that the combine of Manipal Health Enterprises Pvt Ltd and TPG Capital is the likeliest partner for a merger that would create India’s largest hospital chain.

Meanwhile, Sunil Kant Munjal of Hero Enterprise Ltd, and Dabur Ltd’s Anand Burman and Mohit Burman, who are existing shareholders of Fortis Healthcare, have offered to pump Rs1,250 crore into the firm as well. The proposal is under consideration by the board (See: Hero’s Munjals and Dabur’s Burmans propose joint investment in Fortis). https://www.domain-b.com/companies/companies_f/fortis_healthcare/20180413_munjals.html

IHH, one of Asia’s largest healthcare operators, bid Rs160 ($2.45) per share to buy Fortis last week, topping a Rs155 per share offer the Manipal-TPG combine. (See: Malaysia’s IHH plans to outbid Manipal Hospitals for Fortis: report). https://www.domain-b.com/companies/companies_f/fortis_healthcare/20180412_outbid.html

On Monday the Malaysian firm said the Fortis board sent it a response letter indicating it was unable to engage with IHH due to binding agreements with Manipal Health Enterprises Private Ltd, Manipal Global Health Services and TPG Asia.

Fortis is in trouble since reports emerged that the company’s founders took at least Rs500 crore out of the firm without board approval. Brothers Malvinder Singh and Shivinder Singh have resigned from the company and have lost control of their shareholding due to mounting debt.

Manipal’s controlling shareholder Ranjan Pai said in an interview with Bloomberg last week that the reason he was not buying Fortis outright was because of the potential liabilities posed by the investigations.