The battle for control of Fortis Healthcare Ltd. intensified after KKR-backed Radiant Life Care Private Ltd. entered the fray with an offer to buy more than a quarter of the cash-strapped company’s hospital business.
In its non-binding offer, Radiant, the fifth suitor for Fortis, proposed to make an investment and restructure the company, Fortis said in a filing that had Radiant’s offer letter attached to it.
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To spur revised offers
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“I think now, we will have revised offers coming,” said Gaurang Shah, head investment strategist at Geojit Financial Services.
The company has become the target of a takeover battle that includes offers from China’s Fosun International and Malaysia’s IHH Healthcare.
The other two offers are from Manipal Health Enterprises and a consortium of two prominent business families, Hero Enterprise and the Burman Family Office. All the offers value Fortis within a tight range of $1.2-$1.4 billion.
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Radiant has proposed to spin off the hospital business to form a new company, which will exclude Fortis’ stake in diagnostics chain SRL Ltd.
The all-cash offer to shareholders of the proposed new company is ₹126 per share, Radiant said. This offer values the whole of Fortis at ₹165 per share, or ₹85.58 billion ($1.30 billion), including the SRL stake.
The offer is contingent on Radiant being able to buy 26% or more shares of the proposed new company.
The interest in Fortis, which runs about 30 hospitals, comes as investors look to tap soaring demand for private healthcare against the backdrop of a stretched public healthcare system. Private hospitals could also be boosted by Prime Minister Narendra Modi’s plans to implement a healthcare programme aimed at providing insurance cover to about half of India’s population.