Battle for Fortis: Giant PE firm KKR backed Radiant Life Care joined the race to pick up an equity stake in Fortis Healthcare Ltd closing on the heels of bids submitted by Fosun and IHH.
Battle for Fortis: Giant PE firm KKR backed Radiant Life Care joined the race to pick up an equity stake in Fortis Healthcare Ltd closing on the heels of bids submitted by Fosun and IHH. In a regulatory filing last night, Fortis said, “The company has received an unsolicited non-binding expression of interest from Radiant Life Care Pvt Ltd with a proposal for making investment and/or re-structuring the company subject to certain conditions as mentioned in the offer letter.”
Radiant Life Care has offered to acquire at least 26 per cent stake in Fortis Healthcare (FHL) at Rs 126 per share, excluding its diagnostic business SRL. To fulfil immediate cash requirement, Radiant Life Care said it is prepared to purchase FHL’s interest in FMRI, Gurugram, and Fortis Shalimar Bagh in New Delhi, according to a PTI report.
The bid from KKR comes even as four other bidders fight it out, with each vying to better the other’s offer. Yesterday, Munjal and Burman family office had made an improved offer to invest Rs 1,500 crore directly into Fortis, as compared to their earlier offer of Rs 1,250 crore, without any due diligence. “We have upped the amount that will come into the company upfront to Rs 750 crore out of which Rs 250 crore is part of warrant issue. Also, we have increased the overall amount from Rs 1,250 to Rs 1,500 crores and even raised the share price to Rs 161.60,” SK Munjal told ET Now.
While Munjal and Burman combined offer has a simpler structure, Radiant Life has propsed a demerger of hospital businesses from Fortis Healthcare into “NewCo”, excluding Fortis’ stake in SRL. According to the details, the offer includes an all cash open offer to shareholders of NewCo at price of Rs 165 per share, adjusted for per share value of FHL’s shareholding in SRL, that is Rs 39. The net value then works out to be Rs 126 per share of the NewCo. “The aforesaid per share value of SRL is arrived at assuming equity value of 100 per cent of SRL at Rs 3,600 crore,” Radiant Life said. Further, the company added that its offer is subject to Radiant being able to acquire 26 per cent of more shares of the NewCo via open offer.
“In case Radiant is unable to acquire 26 per cent or more shares of NewCo through open offer, the NewCo shall do preferential allotment at Rs 126 per share to Radiant to enable 26 per cent stake in NewCo,” it added.
Fortis has set up an advisory committee to oversee the evaluation process and assess the binding bids for the company which will be lead by Deepak Kapoor, Former Chairman and CEO of Price Waterhouse Coopers, India. Interestingly, IHH Healthcare as well as Fosun had express a non-binding expression of interest, and sought time to conduct due diligence. Two binding offers have been submitted — by TPG-backed Manipal Hospital and the Munjal-Burman family offices.