Fortis acquires Escorts Heart

Anil Nanda moves Delhi HC to block deal.

Escorts has sold Escorts Heart Institute & Research Centre to Fortis Healthcare, a closely-held company of the Singh family of Ranbaxy, for Rs 650 crore.

Anil Nanda, Escorts chairman Rajan Nanda's estranged younger brother, has filed a plea in the Delhi High Court to block the deal, raising questions over the legal status of the entity changing hands. The plea is scheduled for a hearing on Friday.

"The board of Escorts has approved the proposal. On our side, we are ready to buy up to 90 per cent. Exactly how much, depends on Escorts," Fortis chairman Harpal Singh said.

Escorts chief financial officer Shailendra Tandon said: "We have sold 80 per cent stake of Escorts Heart Institute to Fortis. I would not like to comment on the remaining 20 per cent that is owned by the promoter group and some of the doctors at the institute."

Senior doctors, including executive director Naresh Trehan, hold a chunk of the equity, believed to be up to 10 per cent. "I have ESOPs (employee stock options) and I'm not selling them," Trehan said.

JM Morgan Stanley advised Escorts on the deal, while Fortis had engaged Ernst And Young.

Anil Nanda's move is a reprisal of a similar effort two years ago when Rajan Nanda wanted to sell 17 per cent of the hospital company's equity to Merlion India Fund, owned by Temasak Holdings of Singapore. The fund had backed out of the deal when Anil Nanda had questioned the legal status of the company.