The battle for the takeover of Fortis Healthcare Ltd. took a new twist on Monday with the Manipal Health and Enterprises Pvt. Ltd.-TPG combine roiling the fray with a new sweetened offer.
The combine has now offered to buy shares of Fortis at ₹180 apiece on a preferential basis, an increase from the ₹160 it last offered.
Not giving up
The revised offer, which is valid till May 29, comes barely 4 days after the board of Fortis picked the Hero-Burman consortium’s ₹1,800 crore offer for recommendation to the shareholders.
For the purpose of merger, Manipal-TPG’s latest offer attributes a value of ₹9,403 crore to Fortis, while Manipal Health, which plans to merge Fortis with itself, would retain a valuation of ₹6,070 crore, according to the revised offer filed to the stock exchanges by Fortis.
The combine said it had been following the developments of the past few days and had taken note of negative reactions among Fortis’s shareholders to the board’s decision to accept the Hero-Burman offer.
“We also believe that unlike our offer, the Hero-Burman offer only partially solves the short-term liquidity concerns of Fortis.”
Liquidity issues
It asserted that the Hero-Burman offer failed to deliver any long-term benefits to Fortis or solve larger issues facing the cash-strapped company. Also, it did not address Fortis’s payment obligation for the acquisition of the relevant Indian entities from RHT Health Trust and the exit required to be provided by Fortis to private equity investors in SRL, the diagnostic arm.
“In light of this, procuring the approval of 75% of the Fortis shareholders for the Hero-Burman offer is likely to be very challenging for the Fortis board,” the combine said, justifying its fresh offer.
