Viswanath Pilla Moneycontrol News
Finally the board of India's second largest drug maker made a decision following a 15-hour marathon meet on May 10 to recommend the offer of Munjal-Burmans for shareholders' approval.
Fortis said the shareholder meet may happen after 30-45 days.
Sunil Munjal and Burman brothers have expressed their relief over the board's decision and said they will reach out to large shareholders individually to get their support.
Munjal-Burmans proposed to invest Rs 1,800 crore at a weighted average price of Rs 172 per share through a combination of preferential equity shares and warrants without seeking due diligence. Out of Rs 1,800 crore Rs 1,050 will be paid as upfront investment.
While Munjal and Burmans represent Hero and Dabur - two large Indian corporate groups, they aren't directly into running hospitals, but both groups are associated with healthcare. Sunil Munjal is the president of the family run 1,500-bed Dayanand Medical College and Hospital in Ludhiana, the Burman family has successfully built large-scale healthcare enterprises including Dabur Pharma, HealthCare at HOME and Oncquest.
However, some shareholders have expressed unhappiness over valuation offered by Munjal-Burmans, other bidders have cried foul on the process.
To be sure the board's decision isn't unanimous, at least three members out of eight have voted against the Munjal-Burmans offer.
These three members were appointed to the board recently on recommendation of minority shareholders East Bridge Capital and Jupiter India Fund.
East Bridge Capital along with Jupiter India Fund in April called for convening an EGM to remove four members on the Fortis board - Brian W. Tempest, Harpal Singh, Sabina Vaisoha and Lt Gen Tejinder S. Shergill on grounds that the board failed to exercise its fiduciary duties towards all shareholders and has failed to maintain expected levels of corporate governance.
The EGM is scheduled to be held on May 22. Any removal of the four directors may alter status-quo.
One large institutional shareholder Moneycontrol spoke to said he isn't happy with the valuation offered and said he will vote against Munjal-Burmans offer as and when it is tabled before shareholders for their approval.
Both IHH Healthcare and Manipal-TPG have opposed the board's decision.
One bidder called the decision as "match fixing".
IHH said it's still in the race and is talking to shareholders on putting out a competitive offer.
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