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Manipal Health Enterprises Pvt Ltd (MHEPL), backed by TPG, has improved its offer for Fortis Healthcare Ltd (FHL) by proposing to infuse Rs 2,100 crore through preferential allotment of equity shares at Rs 160 per share. The offer was submitted to the Fortis board on Sunday -- the last day stipulated for MHEPL to give its revised bid.
The board of directors of FHL will now meet on May 10 to evaluate the binding bids made for the company by different suitors in line with recommendations of the expert advisory committee. Other companies which have submitted binding bids for Fortis’ hospital chain include Malaysia’s IHH Berhad, the Munjal-Burman families duo, and Radiant Lifecare-KKR.
The company has also proposed to merge MHEPL into FHL and has valued the latter at Rs 8,358 crore. Earlier, Fortis’s hospital business was valued by MHEPL at Rs 6,332 crore. MHEPL has been valued at Rs 6,070 crores.
“The proceeds from the preferential allotment will be used by FHL towards repayment of existing loans, working capital purposes and partly to fund the acquisition of relevant Indian entities from RHT,” the submission stated.
MHEPL has laid down that to oversee the use of proceeds of the preferential allotment, the subscriber(s) shall have the right to appoint such number of non-executive directors pro rata to their shareholding after the preferential allotment (with a fractional number being rounded up to the nearest whole number), subject to the FHL board comprising a minimum of seven directors.
“It is clarified that the preferential allotment is being undertaken only to provide immediate liquidity to FHL by way of a minority investment in FHL. The preferential allotment and the ability to appoint directors as aforesaid, shall not vest control in the subscriber(s) and, accordingly, no open offer is required to be made,” the MHEPL proposal stated.
FHL, on Thursday, appointed Arpwood Capital Pvt Ltd, an eminent investment banking firm, as financial advisor to the board of directors of the company. Fortis’ troubles deepened in January this year when former promoters Malvinder and Shivinder Singh lost a Rs 3,500-crore arbitration case against Japanese drug maker Daiichi. The company and the Singh brothers are the focus of multiple probes by the Serious Fraud Investigation Office and the Securities and Exchange Board of India.
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