Radiant makes binding bid for Fortis Healthcare

KKR backed Radiant Life Care put in binding offer for Fortis Health as the deadline for the bids end.

Malaysian giant IHH also revised its offer to be eligible for the deal process. Manipal-TPG, Munjal-Burman had already been considered as their bids met the criteria.

Radiant has offered upfront amount of Rs 1200 crore by buying Fortis Mulund asset. The bid also states that the asset buy will not restrict any other bidder from participating in the process. Rest of the offer for buying whole of hospital business including RHT is contingent on due diligence.

Diagnostics chain SRL is not part of the deal by Radiant. It proposes to spin off SRL and depending on the value the offer will give an implied value of Rs 170-175 per share for Fortis Healthcare.

Malaysian company IHH has also put in a binding bid offering to give Rs 650 crore upfront and Rs 3350 crore post due diligence. Total offer by IHH stands at Rs 4000 crore and it values the company at Rs 160 per share.

IHH in its offer has asked for three weeks of due diligence process before they can infuse the rest of the Rs 3,350 crore amount, they have also sought exclusivity of four weeks from the start of the due diligence exercise. IHH offer seeks to board seats as part of the deal.

IHH wants a proper financial and legal due diligence before they go ahead with the full transaction, they intend to have access to auditors Deloitte and Luthra & Luthra which is conducting an investigation into the alleged fund diversion case.

Munjal-Burman and Manipal-TPG are already in the fray with binding bids. Sources suggest that Manipal-TPG has the right to match the highest bidder as part of the agreement with the board. Fortis Healthcare has instituted an independent advisory board to evaluate the binding bids which will meet on April 25, Fortis board will meet on April 26 to take the decision.

Most bids are partially binding with only a small portion promised as upfront payment but a bulk of deal is still contingent on the due diligence process.

While shareholders like East Bridge and Jupiter have sought to dismantle the present board of Fortis, proxy advisory firm IIAS has cried foul of the entire sale process and asked for a consideration of all the bids. IIAS report lamented about the widening trust deficit between the Fortis board and its shareholders. Given this kind of pressure, Fortis Board will have to tread cautiously.

All signals suggest a due diligence process being granted to all aspirants for maximization of value from the deal. After all, the value has to be palatable to key shareholders whose votes will be the deciding factor for the finalisation of any transaction at Fortis.