Hero-Dabur group offers to invest Rs 1,800 cr in hospital-chain
Mumbai : Fortis Healthcare on Thursday said its board has recommended the offer of Hero and Burman consortium to its shareholders for sale of its business.
The company’s board post having detailed discussions on the pros and cons of each offer, decided by majority, to recommend the offer of Hero Enterprise Investment Office-Burman Family Office, Fortis Healthcare said in a statement.
The recommendation of the board would be placed before the shareholders for their approval.
Sources indicate that the board was divided amongst the newly-appointed independent directors and the old ones and that the decision was not a unanimous one.
“There were long deliberations over the matter and the recommendations suggested by the expert advisory committee. It was not a unanimous decision, the board was split,” sources said.
Sunil Munjal, chairman of Hero Enterprises, along with Dabur’s Anand and Mohit Burman had sweetened their offer for Fortis on May 1, and had recently said that theirs was the easiest to implement offer. “Our offer is the fastest on time. We anticipate it will take 45-60 days while the other offers will take longer to implement. Moreover, our bid is unconditional and does not include any walk-away clauses unlike the others,” Sunil Munjal, Chairman of Hero Enterprise had said earlier this week.
The Munjal-Burmans have offered to invest Rs 1,800 crore in FHL through a combination of preferential issue of equity and warrants. Their offer values Fortis at over Rs 9,000 crore, or roughly translates into Rs 172 per share. The duo have proposed an upfront infusion of Rs 1,050 crore directly into Fortis. The remaining investment of Rs 750 crore will be infused into the company over the next four months.
They have also sought three board seats in Fortis. Perhaps, the most significant part of their offer is that they have also proposed a strategic sale of the SRL Diagnostics after divesting FHL’s stake in it.
When asked about the Fortis board’s decision, Ranjan Pai, managing director and chief executive officer of Manipal Health Enterprises, said that he was disappointed. “The board obviously felt that this is in best interest of the shareholders. However, this offer does not have any long term vision for FHL,” he said.
Bidding for Fortis closed on May 1. Apart from the Hero-Munjal duo, the Fortis board was considering offers from TPG-Manipal, KKR-Radiant Life Care and IHH Healthcare. Financial advisors Standard Chartered Bank and Arpwood Capital and legal advisors- Cyril Amarchand Mangaldas were appointed by the Board to advise on the matter.
