IHH Healthcare again extends offer validity for Fortis

Malaysia’s IHH Healthcare Bhd has extended its offer validity to invest in Fortis Healthcare Ltd and said it would take part in any new bidding process the Indian company might start.

In a statement to Bursa Malaysia, IHH said it has decided to extend its offer for Fortis to 29 May from 15 May and that it has informed its decision to the board of the Indian hospital chain.

The decision came after the Fortis board, on 10 May, recommended an offer made by a consortium of Hero Enterprise Investment Office and Burman Family Office to the company’s shareholders.

The board decision, made against the advice of some of its own advisers, hasn’t gone down well with a section of the shareholders of India’s second-largest hospital chain.

This prompted Manipal Hospital Enterprises Pvt. Ltd, backed by private equity firm TPG, to revise its offer for Fortis Healthcare Ltd for a fourth time earlier this week.

The Fortis board hasn’t yet commented on a revised bidding process. However, some institutional shareholders are piling on the pressure to remove some directors. Fortis has called for a meeting of shareholders next week to decide on the directors’ fate.

In its letter to the Fortis board, IHH said: “If there is indeed a new bid process that the board is proposing to initiate, we would like to participate in such a process and request that we be kept informed of any developments regarding the same.”

IHH has revised its offer for Fortis thrice, most recently on 1 May. IHH has proposed to invest as much as Rs 4,000 crore in Fortis and has previously said it would make an immediate equity infusion at Rs 175 per share. TPG-Manipal’s latest offer is to invest in Fortis at Rs 180 per share.

The winning consortium of Sunil Munjal-led Hero Enterprise and the Burman Family Office has proposed to invest Rs 1,800 crore. It will invest Rs 800 crore through a preferential issue of equity shares at Rs 167 apiece and Rs 1,000 crore through a preferential issue of warrants at Rs 176 each.

China’s Fosun and KKR-backed Indian hospital chain Radiant Life Care Pvt. Ltd were the other companies that had previously shown interest in Fortis.