New Consolidation Offers for Fortis Due Today

Bidders from the Fortis Hospital Chain will have to pay a minimum investment of Rs 1,500 crore as a preferential allowance as the Fortis Healthcare Board has provided certain conditions so that only bids "serious" farms are made on the Tuesday deadline.

Other conditions include a detailed financing plan for the acquisition of RHT Health Trust, the Singapore-based trust that holds the Fortis real estate assets, with a maturity date of September 30, 2018, and a plan for the SRL arms diagnostics, including an exit strategy for private investors who own a third of the unit.

Bidders will be required to disclose the source of their funds to fund the transaction, including the firm letters of commitment from the lenders and the retention plans of the management and the current employees, said the persons involved in the transaction. . The Fortis Board of Directors was reconstituted after a group of minority shareholders opposed the way in which the bidding process was conducted. On May 29, the new Fortis Board of Directors launched a new tendering process after the Munjal-Burman consortium, whose candidacy had been retained on May 10, gave its agreement.

There were already four bidders in the fray – IHH Healthcare, TPG-Manipal, KKR-Radiant and Munjal-Burman from Malaysia – and they had submitted various competing offers and financial structures. The Munjal-Burman combination had proposed to invest in advance 1050 rupees crore through a preferential allocation of shares (167 rupees per share) and warrants (176 rupees per share). They also proposed to inject an additional 750 rupees of warrants after receiving shareholder approval.

TPG-Manipal had proposed to inject Rs 2,100 crores through a preferential allocation at Rs 180 per share, which would enable it to take back 18.4% of the capital of Fortis at the valuation of Rs 9,403 crore. He planned to buy back the PE investors from SRL for 1,113.4 million rupees.

In the third step, the consortium led by Ranjan Pai suggested merging Manipal Health Enterprises with Fortis Healthcare through a reverse merger after the restructuring of the SRL's board of directors. IHH had planned to place Rs 7,400 crore for a stake of more than 50% in Fortis at Rs 175 per share, while KKR-Radiant offered to buy only the Mulund hospital for a value of $ 1,000. business of Rs 1,200 crore, which would provide immediate liquidity of Rs 680 crore to Fortis Healthcare.

As part of its non-binding offer, it proposed to withdraw SRL so that Fortis could conduct an independent competitive sales process. It also proposed a split of the hospital business into a new company excluding Fortis Healthcare's interest in SRL and announced that it would launch an open offer to the shareholders of this new company at a price of RS 126 per share, provided that Radiant-KKR has acquired 26% or more stake through an open offer or a preferential allotment. The president of Fortis, Ravi Rajagopal, refused to comment on the case.