Published: Fri, May 11, 2018
Medicine | By Earnest Bishop

Hero's Munjal, Dabur's Burman Win Battle For Hospital Chain Fortis

Hero's Munjal, Dabur's Burman Win Battle For Hospital Chain Fortis

The Burman Family Office and Hero Enterprise Investment Office had tabled a binding offer to invest Rs800 crore through a preferential share issue at Rs167 each and Rs1,000 crore via preferential issue of warrants at Rs176 per warrant.

When asked if the decision was unanimous, he said three members of the board, who have been with Fortis, voted for the Munjals-Burmans bid and out of five new members two voted for the bid and three voted for other options.

Fortis Healthcare Ltd.'s board passed over bids backed by U.S. private-equity giants TPG and KKR & Co.in favour of the Burman and Munjal families in the contentious battle for control of India's second-largest hospital chain. Sunil Munjal-led Hero Enterprise and Dabur's Anand Burman and Mohit Burman had offered a price of Rs 167 per share through preferential allotment on May 1. The recommendation of the Board would be placed before the shareholders for their approval.

Big name private-equity firms and companies from China to Malaysia were attracted to Fortis by the rare opportunity to increase their presence in one of the world's most underserved health-care markets.

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Having played the belle of the ball over the past few weeks, with multiple suitors aggressively competing against each other, the Fortis board finally chose to take the offer from Hero Enterprise Investment Office-Burman Family Office.

Shares of Fortis Healthcare fell almost 3 per cent today after the company announced that its board has picked the offer from Munjals-Burmans combine over four other suitors who made binding offers. The group will also put in '1,000 crore through warrants.

India's second-largest hospital chain said in a statement late Thursday that its board had chosen the offer made by a consortium of Hero Enterprise Investment Office and Burman Family Office. The earlier revised offer of 10 April valued Fortis hospital business at Rs 6,061 crore. The "Enhanced Revised Proposal" offered an immediate equity infusion of Rs 650 crore at a valuation of Rs 175 a share, up from its previous offer at Rs 160 per share, along with a subsequent equity infusion of Rs 3,350 crore subject to satisfactory completion of the due diligence process.

Although he didn't specify, two of the people cited above said that the most recent board members-Ravi Rajagopal, Suvalaxmi Chakraborty and Indrajeet Banerjee-voted in favour of IHH Healthcare's proposal. May 1 was the deadline submitting binding offers. Radiant further proposed a demerger of the hospitals business from FHL into a new company followed by an all-cash open offer to shareholders of the new entity at a price of Rs 126 per share.

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