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Fortis Healthcare Board to meet this week to consider acquisition bids

17 April 2018

Malaysia's IHH Healthcare Bhd said on Monday India's Fortis Healthcare Ltd declined to engage with the company regarding a takeover offer, citing binding agreements made with other parties. It opened at Rs 151.40 and touched high and low of Rs 152.20 and Rs 147.05, respectively, so far.

Last week, IHH had joined the race to acquire the troubled Fortis Healthcare, offering to acquire its shares at up to Rs 160 apiece, higher than Manipal's Rs 155 which valued the company at Rs 6,061 crore.

"In response to the letter, the board of Fortis has indicated its inability to engage with IHH as Fortis has entered into binding agreements with Manipal Health Enterprises Private Limited, Manipal Global Health Services and TPG Asia", IHH said in a filing with the stock exchange.

Last week, Fortis had received two binding offers - one is a revised offer from Manipal Health Enterprises Pvt Ltd (MHEPL) and the second is a joint binding offer from Hero Enterprise Investment Office and Burman Family Office expressing interest in the company.

Already Fortis Healthcare's shareholders are opposed to TPG Capital-backed Manipal Healthcare Enterprises' (MHE) initial as well as revised offers on the ground that they are undervalued.

On the other hand, Fortis Healthcare stated that "the Board of Directors of the Company have not yet made a decision". Brothers Malvinder Singh and Shivinder Singh have resigned from the company and have lost control of their shareholding due to mounting debt.

"As an alternate to expanding the board, the company must appoint a special committee to the board, that will advise the board on the sale", it said.

This time, however, IHH has justified that it believes in the potential of the Indian healthcare story, and is positive that its partnership with Fortis could deliver maximum value to its shareholders.

In the meantime, shareholders of IHH have been advised to exercise caution and seek appropriate independent advice when dealing in its shares.

As reported by PTI, all the three options have different consequences for the future of Fortis and taking the right call will now be crucial.

As per the report, "shareholders need a decision-making body that is objective, independent, and does have a historical association with the promoter group or their companies".

Fortis Healthcare Board to meet this week to consider acquisition bids