Munjals-Burmans bid opted due to certainty, liquidity issues: Fortis

Majority of Fortis Healthcare's board opted for the Munjals-Burmans offer keeping in mind the certainty and liquidity issues, the company's director Brian W Tempest said on Friday.

While five board members had voted in favour of the Rs 18 billion offer, three members had opted for other offers out of the four binding bids that Fortis Healthcare had received.

"We looked at all the binding bids from the point of view of certainty and liquidity for the company...We took advice from the expert committee, from two financial organisations and from a legal organisation," Tempest told reporters here.

When asked if the decision was unanimous, he said three members of the board, who have been with Fortis, voted for the Munjals-Burmans bid and out of five new members two voted for the bid and three voted for other options.

Another major reason for accepting the bid was that "they have several investments in the healtcare sector".

Accepting the offer was a culmination of a process which started two years ago, Tempest said, adding that it would now be presented to shareholders for approval.

"There will be a shareholders' meeting on this within 30 days and I am positive that there will be a support from the shareholders for the decision," he said.

On the issue of erstwhile promoters Malvinder Singh and Shivinder Singh continuing on the board of diagnostics chain SRL, Tempest said they should step down.

On the immediate task of the management of the cash-strapped healthcare chain, he said, "I would want them to focus on the performance and results of the of hospital business." Fortis announced last night that its board has picked the offer from Munjals-Burmans combine over four other suitors who made binding offers.

The board decided by majority to recommend to shareholders to approve the revised offer of Hero Enterprise Investment Office and Burman Family Office (Dabur group) made on May 1 for an upfront equity infusion of Rs 800 crore at a price of Rs 167 per share through preferential allotment.

The Munjals-Burmans further agreed to invest another Rs 1,000 crore via preferential issue of warrants priced at Rs 176 per share.

Malaysia's IHH Healthcare, Manipal-TPG combine and KKR-backed Radiant Life Care had also put in binding bids for Fortis.

The fifth bidder, Fosun Health Holdings, an arm of Fosun International, which made a non-binding proposal to invest a total of USD 350 million (over Rs 2,295 crore) at a price up to Rs 156 per share, did not revise its offer.

"Disappointed" over losing the race to acquire Fortis Healthcare, Malaysia's IHH Healthcare said today that it is currently evaluating options while seeking support from shareholders of the Indian firm.