Fortis Healthcare Limited on Tuesday informed the market regulator that it has received an unsolicited non-binding expression of interest from China's Fosun Health Holdings, a wholly-owned subsidiary of Fosun International Limited. With this offer, Fosun becomes fourth company ready to invest in the cash-strapped Indian healthcare chain. Fosun's current investment offer could lead to a potential bidding war as three companies, TPG-Manipal combine, Malaysia-based IHH Healthcare Munjal-Burman family combine, have already made offers to help Fortis.
The Chinese healthcare company, in a regulatory filing in the Hong Kong Stock Exchange on Tuesday, proposed to infuse up to $350 million (around Rs 2,295 crore) at a share price of Rs 156 in the cash-strapped Indian healthcare company, subject to due diligence that will be completed in three weeks.
"We would seek to identify an approach to support the company's immediate cash needs with up to Rs 100 crore in the next 45 days, including the option of immediately subscribing to a convertible debt instrument, subject to due diligence," said Fosun in the offer laetter. It said the company is also ready to invest in Fortis Healthcare through the primary infusion of $350 million at a price of Rs 156 per share, capping its shareholding at 25 per cent.
Fosun, having assets worth over $75 billion, is already an investor in India's Gland Pharma, reported The Economic Times, adding ithas invested over $1 billion in various companies across India.
"We believe our proposal outlined in this letter will best support the company's (Fortis) immediate needs, while supporting the company and its existing investors at a fair valuation to optimise the long-term return," said Fosun. As part of the proposal, Fosun would also seek specific rights commensurate with its investment including, but not limited to, board seats proportionate to its holding, the letter said.
Malaysia's IHH Healthcare on Tuesday said Fortis Healthcare refused to accept its offer to acquire the company citing binding agreements with Manipal Health Enterprises. Last week, IHH had proposed to acquire Fortis Healthcare by offering to buy its shares at Rs 160 apiece, higher than Manipal's offer of Rs 155 per share that had valued the company at Rs 6,061 crore. Manipal Health had raised its offer from Rs 155 per share after the initial valuation of Rs 5,003 crore. Besides, Sunil Kant Munjal-led Hero Enterprise Investment Office and Burman Family Office have also offered to invest Rs 1,250 crore in Fortis at up to Rs 156 per share.
The Fortis board will now meet this week before taking a final decision on the possible investment. In March, the Fortis board had approved the demerger of its hospitals business, which was to be acquired by Manipal Hospitals and TPG Capital, along with the sale of 20 per cent stake in diagnostics chain SRL Ltd, for Rs 3,900 crore.