Fortis says chose Munjal-Burman for certainty of funds, Manipal feels let-down

The decision by the Fortis Healthcare board to recommend the offer of the Hero and Burman Family consortium for sale of its business was primarily guided by the certainty of liquidity flowing in to enable greater efficiency, Fortis Director Brian Tempest said here on Friday.

However, other contenders expressed their disappointment over the same.

Following a board meeting here that lasted till late on Thursday, Fortis said its board had decided to recommend the offer of Hero Enterprise Investment Office-Burman Family Office to its shareholders.

"The Board, by a majority, decided to recommend the Hero-Burman Family offer to shareholders looking at the binding bids for the point of certainty of liquidity flowing into the company," Tempest told reporters.

"After many months of engagement with Fortis, including due diligence, we are disappointed that the board has come to this conclusion. Manipal remains of the view that our offer proposed the most appropriate short and long-term plan for Fortis and was in the interests of all stakeholders, including shareholders," Manipal Group's CEO Ranjan Pai said in a statement on Friday.

"Our offer comprised a significant and necessary immediate investment, a clear strategic plan to fundamentally transform Fortis, as well as synergies from a combination with Manipal. It is now for shareholders to decide whether they will accept the board's recommendation," he added.

Earlier, Fortis' Board had received offers from suitors such as Hero Enterprise Investment Office and the Burman Family Office, Fosun Health Holdings, IHH Healthcare Berhad, Manipal Hospital Enterprises and Radiant Life Care for infusion of funds.

"Hero-Dabur have 30-40 investments in healthcare, have one hospital, which has a nurses training college and another training hospital. To run this business efficiently, we'll need a regular supply of nurses and doctors," Tempest said.

According to Fortis, the entire exercise for selecting the Hero and Burman consortium involved a process that witnessed "deliberation and recommendation" by an independent Expert Advisory Committee (EAC).

"The Board considered the views of the EAC, financial and legal advisors, and following extensive discussions arrived at this decision," the company said in a late night statement on Thursday.

The EAC comprised of Deepak Kapoor, former Chairman of PWC (India) and Lalit Bhasin, Chairman of the Indian Society of Law Firms, along with two financial advisors - Standard Chartered Bank and Arpwood Capital - while Cyril Amarchand Mangaldas were the legal advisors.

The deal envisages an infusion of Rs 800 crore via a "Preferential Allotment of Equity Shares at Rs 167 per share or as per SEBI ICDR guidelines whichever is higher...".

It also encapsulates a "Preferential Issue of Warrants of Rs 1,000 crore at Rs 176 per share or as per SEBI ICDR guidelines whichever is higher."

--IANS

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