Fortis Healthcare accepts investment offer of Rs. 1,800 cr from Hero-Burman
11 May 2018
The board of cash-strapped hospital chain Fortis Healthcare Ltd yesterday accepted an investment offer of Rs1,800 crore ($267.7 million) from an investment group of Hero-Burman after a bidding war by four investment groups, for an undisclosed stake.
“The Board, post having detailed discussions on the pros and cons of each offer, decided by majority, to recommend the offer of Hero Enterprise Investment Office-Burman Family Office," Fortis Healthcare said in a statement to the BSE.
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.
The Fortis' board said that its recommendation would be sent to shareholders for approval.
Hero Enterprise is an investment company formed by Sunil Munjal, a member of the family that runs India’s largest motorcycle maker Hero, while the Burman Family Office is the private investment arm of the family that owns consumer goods company Dabur India.
Others who had submitted binding offers were KKR & Co-backed Radiant Life Care, Malaysian major IHH Healthcare, Manipal-TPG Capital consortium and Munjal and Burman family offices.
Fortis Healthcare is the second-largest hospital chain in the country currently encompassing both the hospitals and the diagnostics businesses.
It operates a network of 34 hospitals with 4,600+ beds employing 2,600+ doctors and 6,500+ nurses. It operates its healthcare delivery services in India, Dubai, Mauritius and Sri Lanka.
It is unclear as to who will run the hospital chain, as neither Dabur nor the Hero group have any previous experience in managing hospitals, unlike rival hospital group or Manipal TPG, Radiant LifeCare or Malaysia's IHH, all of whom were in the fray for Fortis.