Board to decide on three offers this week: Fortis Healthcare

IHH, one of Asia's largest healthcare operators, offered to buy Fortis last week at a price that values the hospitals chain at Rs 160 share a piece – valuing the company for around USD 1.3 billion -- higher than Rs 155 per share and USD 1.2 billion valuation offered by Indian rival Manipal Health Enterprises.

IHH said at this juncture it hasn’t entered into any discussions, negotiations or transactions.

Spokesperson of IHH-based in Singapore declined to comment on the company’s future course of action after its offer has been turned down.

The other interested party – Sunil Munjal of Hero and Burmans of Dabur said they haven’t received any response from so far Fortis on their offer.

Munjal and Burmans have once again claimed their offer to be stand apart from the other two offers on grounds that its simple, direct investment aimed at meeting immediate liquidity needs without asking for change of the structure, operations or delineating the assets under the company that may be require legal and regulatory approvals taking lot of time.

“At this juncture, Fortis Healthcare needs a visionary strategic partner with significant operational expertise and sufficient balance sheet strength to navigate troubled water and steer the company in the fight direction,” a statement from Munjal and Burmans said on Monday.

Munjal and Burmans have jointly made an unsolicited binding offer to invest Rs 1,250 crore directly into the company through a preferential allotment. Of the Rs 1,250 crore - Rs 500 crore will be infused immediately, and Rs 750 crore post due diligence to be completed within three weeks.

Call to appoint special committee to assist Board in sale process
Proxy advisory firm IiAS has set cat among the pigeons with its latest report asking Fortis to appoint a special committee to the board to advice on sale of the company.

IiAS suggested the institutional shareholders to  suggest names for committee membership, either directly or collectively through the Association of Mutual Funds – AMFI - and the Life Council.

“To evaluate the three bids, shareholders need more credence at the board-level: all four members of the current board have been associated with either the Fortis group, Religare group, or Ranbaxy for long tenures in the past,” IiAS report said.

IiAS said it 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.

"As an alternate to expanding the board, the company must appoint a special committee to the board, that will advise the board on the sale. This committee should be tasked with evaluating the bids and structures, narrow in on the most suitable buyer and negotiate the final contours and terms with the chosen buyer," it added.

Shares of Fortis dropped 2.60 per cent to close at Rs 148 on BSE.