Fortis leads race for Wockhardt Hospitals

Emerges as front-runner after Apollo opts out of fray

Fortis Healthcare, which is owned by former Ranbaxy promoters Malvinder Singh and Shivinder Singh, has emerged as the lead bidder to acquire a part of Wockhardt Hospitals.

Fortis became the front-runner after the Chennai-based Apollo Hospitals Group retracted its plans to buy three of the 12 hospitals owned by Wockhardt Chairman Habil Khorakiwala and family.

Sources close to the developments said the deal with Fortis, either for buying two-three hospitals or picking up a minority stake of about 25 per cent, may happen within three-four weeks. Fortis is more interested in an outright purchase of the hospitals, which include Wockhardt’s leading hospitals in Bangalore and Mumbai, as this would add to its stand-alone assets.

“The proposals from Fortis are the most attractive so far and discussions are on to conclude the deal,” sources said.

Apart from Fortis and Apollo, the Manipal Group of hospitals and two private equity players were also in the fray, but the decision of the management to sell only a minority stake proved to be a stumbling block while finalising the deal with them, sources said.

The deal, which may be in range of Rs 900-1,200 crore, depends on the final mutually agreeable valuations, they said.

“We are a responsible listed company and cannot comment on deals until they are concluded. As a policy, Fortis will not respond to market speculations,” said Sudarshan Majumdar, marketing director and official spokesperson for Fortis Healthcare.

A Wockhardt spokesperson declined to comment.

Meanwhile, Apollo Hospitals said it has dropped its plans of acquiring Wockhardt’s hospitals in Bangalore, Kolkata and Mumbai.

“The evaluation was done and what we felt as a fair valuation for our shareholders and investors did not match. We had to regretfully drop the purchase,” Preetha Reddy, managing director, Apollo Hospital, today said on the sidelines of a press conference in Kolkata.

She said, since Apollo is already present in Bangalore, Kolkata and Mumbai and its geographical footprint in these regions is pretty strong, it was not prudent to proceed with the offer.

Drug major Wockhardt, which is trying to repay debts worth over Rs 3,400 crore, is also undertaking a debt-restructuring plan and has received shareholders’ approval to sell off its animal healthcare division.

However, revenues from the animal healthcare division are less than Rs 100 crore and the company may not be able to raise much funds, sources said. The company is also looking at restructuring and hiving off some of the subsidiaries acquired overseas.