Fosun joins bidding race for Fortis, offers to invest Rs2,300 crore

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Mumbai: Chinese healthcare firm Fosun Health Holdings Ltd late on Tuesday submitted an unsolicited non-binding offer to the board of Fortis Healthcare Ltd to acquire its hospital assets, further intensifying competition among the bidders.

A subsidiary of Fosun International Ltd, listed on the Hong Kong stock exchange, has agreed to invest $350 million (Rs2,300 crore approximately) including a preliminary investment of Rs100 crore, Fortis stated in an exchange announcement late on Tuesday evening.

The offer submitted by Fosun is likely to add confusion for the Fortis board as it not only offers preliminary fund infusion into the company but also takes into account the acquisition of RHT Health Trust capping its shareholding at 25% without any significant change in management. The firm has agreed to infuse Rs100 crore within the next 45 days and the balance through primary infusion after completing its due diligence within a span of three weeks. It has agreed to offer Rs156 a share, similar to what is being offered by other competitors. Fosun has invested about $1 billion in Indian healthcare sector so far.

A Fortis spokesperson told Mint over phone that the board will consider all eligible offers which maximize value for stakeholders.

So far, Fortis board has three offers for its hospital assets apart from Fosun. TPG Capital backed Manipal Hospital Enterprises Pvt. Ltd has made a binding offer at Rs155 a share, and takes into account the RHT acquisition as well. The firm had submitted a revised offer to meet shareholder expectations allowing the existing shareholders higher participation in the new entity and 21% higher valuation than its previous offer.

Fosun, in its offer, has also stated that it “encourages” existing shareholders to participate in the company’s future by proposing rights issue to support strategic acquisitions in future. “Fosun does not anticipate making any significant changes to the senior management operations or clinical excellence of Fortis, but will actively support the company with specific plans to improve operating performance,” the company stated.

The offer also states that Fosun will be reviewing Fortis’ operational expenses, accessibility to debt capital market, non-operating assets available for sale and will look at settling financial and legal issues pertaining to various investigations and transactions linked to the former promoters of the company.

Meanwhile, Sunil Munjal of Hero Group along with Arvind Burman and Mohit Burman of Dabur Group have submitted an unsolicited binding offer to infuse Rs1,250 crore, with Rs500 crore being infused upfront. The offer, however, does not talk about RHT transaction. IHH Bhd of Malaysia has also submitted a non-binding offer at Rs60 a share.