Radiant Life Care seeks more time from Fortis Healthcare for binding offer

Private equity firm KKR-backed Radiant Life Care, which joined fray for acquiring the assets of cash-strapped Fortis through a non-binding expression of interest on Thursday, has sought more time to complete due diligence before it can make a binding offer. 

“We intend to ask Fortis Healthcare to allow us to complete due diligence within next few weeks,” said Radiant Life Chairman Abhay Soi.

Radiant has proposed that the hospital business of Fortis  be demerged into a new company excluding Fortis’s stake in diagnostics firm SRL. Fortis holds a 56 per cent stake in SRL. The all-cash offer to shareholders of the proposed new company would be at a net value of Rs 126 per share. The offer values Fortis at Rs 165 a share (or a total valuation of Rs 85.58 billion) including the SRL stake. 

Meanwhile, to meet immediate cash needs, Radiant is prepared to buy Fortis’ interest in Fortis Memorial Research Institute in Gurugram and/or Fortis, Shalimar Bagh. However, in that case, the offer value of Rs 126 per share would be reduced to reflect this transaction. It also added that the offer is subject to Radiant being able to buy 26 per cent or more shares of the new firm via open offer. Radiant would then carry out a rights issue, which would be underwritten by them to fund the Religare Healthcare Trust (RHT) acquisition. 

However, with Fortis board deciding that it would only consider binding bids in its April 26 meeting, Radiant’s offer might not be taken up for approval. Two other suitors — IHH Healthcare and Fosun — have also offered non-binding bids.

“If the priority is to get best deal for all shareholders, why the tearing hurry?” Soi asked referring to the board’s decision to consider binding bids received till April 25. The board on Thursday appointed an advisory committee to take a call on the binding offers it has received. The panel is expected to submit its recommendation to the board on  April 26. 

Fosun was not available for comment and an IHH spokesperson declined to comment. IHH had revised its non-binding offer to the Fortis board on April 18. In its revised proposal, IHH had said it is ready to infuse Rs 40 billion at Rs 160 a share, which will fund the buyout of RHT assets as well as provide immediate liquidity. 

KKR & Co owns a 49 per cent stake in Radiant, which is in the business of managing health care facilities. 

Fortis has received several offers in the past one month of which two are binding — one by TPG-Manipal, and another jointly by Sunil Munjal of Hero Enterprise and the Burman family office (of Dabur).