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The takeover battle for Fortis Healthcare Ltd intensified after KKR-backed Radiant Life Care Pvt Ltd has entered the fray with an offer to buy more than a quarter of the cash-strapped company's hospital business.
Radiant Life has proposed to make an investment and/or re-structure Fortis Healthcare as part of a non-binding offer, the country's second-largest hospital chain operator said in an exchange filing today.
“I think now, we will have revised offers coming,” said Gaurang Shah, head investment strategist at Geojit Financial Services.
Fortis had also said on Thursday that it set up an advisory committee to evaluate binding bids. The committee is expected to give its recommendation to the board on April 26.
As per the latest offer, Fortis will first have to demerge its hospital business into a separate entity, excluding its 56 per cent stake in SRL. Radiant will then make an open offer to the shareholders of the new entity at an adjusted price of Rs 126 per share with an intention to acquire at least 26 per cent stake.
If Radiant fails to acquire this stake, it will infuse a sum similar to the cost of 26 per cent stake in the new entity. Radiant will then carry out a rights issue which will be underwritten by them to fund the acquisition of RHT, a Singapore-listed trust.
The offer values Fortis at Rs 165 per share, or Rs 8,558 crore($1.30 billion), including the SRL stake.
Radiant has also offered to buy Fortis' interest in FMRI and Shalimarbagh hospitals. It said that the offer is subject to satisfactory due diligence. KKR & Co owns a 49 per cent stake in Radiant with its $200 million investment in 2017.
This is the fifth deal that Fortis has received. Fortis Healthcare had on Wednesday received a fourth offer for its hospital chain business — this time from China’s Fosun International Group.
The other groups that have made offers for the company include the TPG-Manipal combine, Malaysia’s IHH Healthcare and the Munjal-Burman family.
Also read: Only Manipal, Munjal-Burman may be left in Fortis race
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