Fortis to vet all options

Modesto Morganelli
Aprile 17, 2018

Such a difference in stance may give rise to hostile move by the foreign player, sources said.

Malaysia's IHH Healthcare Bhd has made a proposed offer for Fortis worth $1.3 billion, while smaller local rival Manipal Health Enterprises Pvt Ltd, has made an offer of about $1.2 billion.

"The Fortis board will be meeting this week 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 beleaguered healthcare chain said in a statement.

The first offer for Fortis is from Manipal Health Enterprises that wants to separate the hospital business from the diagnostic and create two listed entities.

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.

As part of its proposal, Tan stated that IHH will also work with the board and management of Fortis to identify optimal financing solutions to enable the company to "fulfil its commitments during this challenging phase and stay afloat". Sources said that the offer from the Hero Enterprise-Burman Family office is unlikely to find favour with the board as it does not provide for the future growth path of the company that is operating in the capital-intensive healthcare business. On Monday, Fortis Healthcare's stock closed 2% down at Rs 149. However, Munjal-Burman joint offer still awaits a final call.

IHH had on April 11 issued a non-binding letter issued on April 11 to Fortis expressing its interest to participate in Fortis and its affiliates.

Meanwhile, proxy advisory firm, IiAS said that shareholders of Fortis Healthcare need an objective and independent decision-making body to advise its board on the company's sale.

The offer came about nine months after IHH walked away from bilateral talks with Malvinder and Shivinder Singh, who were in control of Fortis at the time.

IiAS believes the current board can get additional support in assessing the three bids and coming to a decision among the complex sets of pulls and pressures, without necessarily waiting for board expansion.

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