Fortis to decide on bids anytime this week, IHH may emerge frontrunner

Curtains on the Fortis Healthcare bidding process could be drawn anytime in the next three days as the board is evaluating the two bids it has received from IHH Healthcare and Manipal-TPG consortium with the help of financial and legal advisors.

An official of Fortis said the board is yet to take a call and a final decision on the bids could be expected by Friday.

Moneycontrol learned from sources that the Malaysian healthcare provider, backed by the southeast Asian country’s sovereign fund Khazanah, had emerged as the frontrunner for Fortis.

IHH is said to have made a binding offer to invest around Rs 4,000 crore through a preferential issue valuing the company of about Rs 175 per share.

"The bid covered all the conditions laid by the Fortis board," said a person associated with IHH Healthcare having knowledge of the matter.

The above person, while expressing confidence about IHH sealing the deal, said there is no problem with funds as the Malaysian company has a war chest of $2 billion at its disposal.

"We are just waiting for the announcement of the board, which can be expected anytime now," he added.

Meanwhile, Manipal-TPG consortium remained tight-lipped on details but said it's waiting for the board to take a final call.

"We are cautiously optimistic," said Ranjan Pai, chairman of Manipal Hospitals, referring to the possibility of the consortium closing the deal. Pai declined to give further details.

The last time, Manipal-TPG had valued Fortis at Rs 180 per share, making it the highest bidder. The consortium also said it will invest Rs 2,100 crore upfront as part of the deal.

Moneycontrol earlier reported that the valuation offered by the consortium for Fortis may not be the same.

Last month, beleaguered healthcare provider Fortis had extended the deadline for submitting binding bids due to delay in the release of audited financial results. That was after the hospital chain initiated a fresh bidding process following a complete revamp of its board of directors.

The board has shortlisted four suitors — Munjal-Burmans, Manipal-TPG, IHH and Radiant Life Care — to participate in the bidding process.

Radiant Life Care and Munjal-Burmans have opted out of the race.

Delay in declaring audited numbers, former promoters Singh brothers' claim on brands, deteriorating finances and onerous conditions put by the board have sapped the enthusiasm of the bidders.

To discourage non-serious bidders, the Fortis board put conditions like minimum investment of Rs 1,500 crore by way of preferential allotment and sought detailed funding plan for the acquisition of RHT Health Trust (RHT) with long-stop date or last date by which something must be done.​

Fortis declared audited financial statement last week after deferring several times.

RHT is a separately listed Singapore-based trust that holds Fortis’s real estate assets like hospitals.

​Shares of Fortis declined 0.32 percent to close at Rs 140.35 on BSE, while the benchmark Sensex gained 0.85 percent to end 36,239.62 points.