Fortis Healthcare Ltd said it has received an unsolicited non-binding proposal from a unit of Fosun International, making the Chinese business conglomerate the fourth bidder to buy into India’s second-largest hospital chain.
Fosun Health Holdings Ltd intends to provide Rs 100 crore ($15 million) in the next 45 days to support the immediate cash needs of Fortis and invest up to $350 million in total, the Indian company said in a statement late Tuesday evening. The investment will give Fosun a stake of no more than 25% in Fortis, it said.
The Chinese company has proposed a primary infusion of capital at Rs 156 per share subject to due diligence to be completed within three weeks. Shares of Fortis were trading around Rs 147 apiece on Wednesday morning.
Fosun’s interest in Fortis comes after the Chinese firm completed its debut deal in the Indian healthcare sector last year to acquire a 74% stake in drugmaker Gland Pharma Ltd. Fosun, which was founded in 1992, has business interests in healthcare services, healthcare insurance and pharmaceuticals.
The offer from Fosun is the latest twist in the sale of Fortis, which has already generated interest from three other bidders.
Last month, Fortis had announced that its board had approved the sale of its hospital business to private equity firm TPG Capital-backed Manipal Health, ending months of speculation around the transaction.
A merger between Manipal and Fortis has the potential to create India’s largest healthcare services provider by revenue, outranking Apollo Hospitals Enterprise Ltd.
Manipal sweetened the offer last week amid growing disappointment of Fortis shareholders and a possible counter bid from Malaysia’s IHH Healthcare. The revised offer valued Fortis’ hospital business at Rs 6,061 crore, or Rs 116 per share, up almost 21% from the previous offer.
Manipal-TPG’s revised offer was followed by a surprise joint proposal from Hero Enterprise Investment Office and the Burman Family Office. And on Friday, it became official that IHH Healthcare was offering Rs 160 per share subject to satisfactory completion of limited due diligence.
IHH’s offer surpassed the revised bid of Rs 155 per share by Manipal-TPG, and the Rs 156 per share joint offer by the Munjal family’s Hero Enterprise Investment Office and Dabur’s Burman Family Office.
However, IHH earlier this week said that Fortis had declined to take part in takeover talks.
Meanwhile, Fortis has issued a statement saying its board will meet this week to look at all eligible options.
The Fortis sale has been delayed due to the legal cases against its founders, brothers Malvinder and Shivinder Singh, who lost control of the healthcare firm after their stakes plunged to low single digits.
In February, the Singh brothers had resigned from the board and now own just 0.77% in Fortis, compared to the 25% stake they held at the end of December 2017, stock-exchange filings show.
By Joseph Rai
Source: VCCircle
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