IHH, Radiant Life Care submit revised bids for Fortis Healthcare

Revised offers for Fortis Hea­lt­­h­care have continued to pour in ahead of the hospital chain operator’s board meeting on Thursday.

Given the Fortis board will consider only binding bids, Malaysian hospital chain IHH Healthcare Ber­had and KKR-backed Radi­ant Life Care on Tuesday revised their offers for the beleaguered firm.

In its revised proposal, IHH submitted a binding offer to infuse Rs 6.5 billion, valuing Fortis at Rs 160 per share. IHH said that according to its assessment, Fortis would need an equity infusion of around Rs 40 billion for working capital and buying the asset portfolio of RHT Health Trust. IHH plans to invest another Rs 33.5 billion in Fortis through preferential allotment of shares and submitted a non-binding offer for the second larger tranche. The investment will be carried out on equity valuation of Rs 160 per share. IHH aims to complete due diligence within three weeks.

IHH has also sought the right to appoint two directors to the Fortis board. In its letter to Fortis, the Malaysian hospital chain said the revised proposal had to be accepted in its entirety, and not in parts. This is the second revision to the IHH offer.

Radiant Life Care submitted a binding offer to acquire Fortis hospital in Mumbai's Mulund area for enterprise valuation of Rs 12 billion. This would help it get immediate liquidity, Radiant said. It  has proposed spin off of the diagnostic business and has  made a non-binding offer to acquire only the hospital business of Fortis at a valuation of Rs 126 per share. Radiant Life Care has proposed a rights issue to fund the acquisition of assets from RHT. With the revised offer, IHH and Radiant Life Care join Manipal Hospitals and Hero Enterprise-Burmans, which have submitted binding bids for Fortis Health­care. Apart from four  binding off­ers, Fortis has also received non-binding offers from Fos­un. IHH, which had sent a non-binding offer, revised it to a binding one (at least partly) on Tuesday. An advisory panel headed by Deepak Kap­oor, former chief executive officer of PwC India, will meet on Wednesday and examine the offers before they are taken up for approval the next day.

The Fortis board's decision to only accept binding offers has led to displeasure among some potential inves­tors and shareholder advisory firms. Proxy advisory firm Institutional Investor Advi­sory Services (IiAS) said, “True price discovery will occur only if more bidders are allowed to compete.”