Fortis Healthcare shareholders need an objective and independent decision-making body to advise its board on the company's sale, which has received three takeover bids, proxy advisory firm IiAS said today.
Currently, there are three offers, which are extremely diverse, it said in a report.
"While the current situation at Fortis is unfolding in as dramatic a fashion as Sholay (Hindi movie) did, its fall from grace is perhaps similar to that of Satyam Computer Services," it said,
The decision on which bid to accept cannot be driven by valuation alone as there are questions regarding subsequent control and the issues regarding the current promoters' need to be dealt, it added.
According to the report, all the three options have very different consequences for the future of Fortis and taking the right call will now be crucial.
IiAS believes the current board can get additional support in assessing the three bids and coming to a decision among the complex sets of pulls and pressures, without necessarily waiting for board expansion.
"As an alternate to expanding the board, the company must appoint a special committee to the board, that will advise the board on the sale," it said.
"The committee should be tasked with evaluating the bids and structures, narrow in on the most suitable buyer and negotiate the final contours and terms with the chosen buyer," it added.
As per the report, "shareholders need a decision-making body that is objective, independent, and does have a historical association with the promoter group or their companies".
Institutional shareholders can suggest names for committee membership, either directly or collectively.
The first offer for Fortis is from Manipal Health Enterprises that wants to separate the hospital business from the diagnostic and create two listed entities.
The second one is a joint offer from Hero Enterprise Investment Office and Burman Family Office, which plans to pump in additional cash, and leave the business to run as-is-where-is for now. In addition, the third one is from IHH Healthcare Berhad that has proposed to take over Fortis.
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