Manipal Hospitals and the Munjal-Burman duo continue to be in the race for a stake in Fortis’ Hospitals Ltd (FHL) with the company’s board deciding on Thursday to focus on evaluating only binding offers.

However, companies that made bids tied to due-diligence such as Malaysia’s IHH Healthchare Berhad and China’s Fosun may have lost out.

“What we have decided today is that the Fortis board of directors is going to evaluate the binding offers available to us. In order to do that, we are going to appoint an expert advisory committee that will look at the binding offers. The Standard Chartered Bank will act as financial advisors to the advisory committee,” said Brian Tempest, Director, Fortis board, addressing the media through a telephonic conference after the board meeting on Thursday.

Tempest said that the advisory committee, which will be chaired by Deepak Kapoor, former Chairman & CEO, PwC India, will give its recommendation to the Fortis board by April 26, following which the board will take a decision on the matter.

While answering questions on which bidders had given binding offers, Tempest said that the advisory committee would decide on that but indicated that the ones that had not given offers subject to due diligence such as Manipal Hospital Enterprise Private Ltd (MHEPL) and Munjal-Burman duo might meet the cut.

On the special notice received by FHL for an extra ordinary general meeting (EGM), from National Westminster Bank Plc, as trustee of Jupiter India Fund, East Bridge Capital Master Fund Ltd and East Bridge Capital Master Fund I Ltd, Tempest said that entities with 10 per cent or more shareholding are entitled to call a meeting.

Directors appointment

“They will be putting their case in front of the shareholders,” he said.

The minority shareholders, who together hold 12.04 per cent stake in Fortis Healthcare, have sought to remove Brian Tempest, Harpal Singh, Sabina Vaisoha and Lt. Gen. Tejinder Singh Shergill from the existing board of directors.

They want the appointment of Suvalaxmi Chakraborty, Ravi Rajagopal and Indrajit Banerjee as independent directors.

MHEPL increased its offer to buy FHL’s hospital by about 21 per cent last week in response to opposition by minority shareholders who complained that the deal was undervalued. The new offer values Fortis' hospital business at ₹6,061 crore or ₹155 per share.

The Munjal-Burman family has reportedly increased its offer for FHL to ₹1,500 crore compared with ₹1,250 crore made last week.

As per IHH’s revised offer, the company is ready to infuse up to ₹4,000 crore through a preferential allotment of equity shares at a price not exceeding Rs 160 per share which will fund the buyout of RHT assets as well as provide immediate liquidity towards working capital and infrastructure upgrades.

Chinese healthcare company Fosun’s offer was at a price of up to ₹156 per share via primary infusion. The total investment by Fosun with this proposal will be up to $350 million and shall not enable the company to hold 25 per cent or more securities of Fortis, the company said in its proposal.

Tempest said that the board believed that the management team of the company had spent enough time on the bidding process and the transaction needed to be brought to a close at the earliest so that focus could be on running of the hospital and improving its performance.

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