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Fortis battle: IHH has bid higher than TPG-Manipal, Munjal-Burman, but still it has to bow out

image IHH said that it cannot bid for Fortis as the latter has received a binding offer from other parties. (Image: Reuters)

Race for Fortis: Malaysia’s IHH Healthcare has bowed out of the race despite submitting the highest bid, as Fortis Healthcare has received a binding offer from other parties, as compared to it’s non-binding expression of interest. Notably, while IHH has submitted the highest bid at Rs 160 per share compared to TPG-Manipal’s revised offer at Rs 155; IHH said that it cannot bid for Fortis as the latter has received a binding offer from other parties, ET Now reported citing agencies. Fortis said on Friday that it has received a non-binding expression of interest for a “possible due diligence and participation with the company” from IHH Healthcare.

The channel quoted agencies as saying that IHH has not entered into any talks or transactions currently. “We will make an appropriate announcement in a timely manner, IHH Healthcare told agencies, reported ET Now.

Interestingly, this came within days after TPG-Manipal had raised it’s bid by more than 20%, pegging Fortis hospitals’ equity valuation at Rs 6,061 crore, to woo minority shareholders.

Notably, in the sweetened deal, the swap ratio has also been tweaked in favour of Fortis’ shareholders who will now receive 13.1 shares in the combined entity, as opposed to 10.83 shares earlier. The deal had initially incurred the ire of minority investors. “What is the sanctity of a deal approved by a board of directors appointed by a group of shareholders who are no longer shareholders of the company?” Rakesh Jhunjhunwala questioned the deal in an interview to The Economic Times.

After this, the race had another contender, with a joint bid from Hero’s Munjals and Dabur’s Burmans offering to invest up Rs 1,250 crore in the company through the preferential allotment route.  Notably, the total amount of Rs 1,250 crore involves a Rs 500-crore binding offer immediately, followed by Rs 750 crore after completion of due diligence is completed “within three weeks, ” according to a statement by Fortis Healthcare on the exchanges. Fortis Healthcare shares were trading at Rs 149.4, down by nearly 2%.

Source: Financial Express