Fortis Board likely to recommend 'Hero-Burman' bid for shareholders' approval

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Fortis Board likely to recommend 'Hero-Burman' bid for shareholders' approval

"We are now evaluating all possible options, to ensure shareholders have the opportunity to realise this value".

Fortis Healthcare share price slipped almost 4 per cent on Friday after its board approved binding offer from Hero-Burman family offices.

The Fortis' board said that its recommendation would be sent to shareholders for approval. "As long-term investors, we are committed to help make Fortis the finest healthcare institution in the region, and create value for all stakeholders", he further stated. "I am not ruling out any possibility, as we understand the business a bit more, we will be happy to commit more money" Mohit Burman, director Dabur and representative of the Burman family office says.

The fifth bidder, Fosun Health Holdings, an arm of Fosun International, which made a non-binding proposal to invest a total of Dollars 350 million (over Rs 2,295 crore) at a price up to Rs 156 per share, did not revise its offer.

The consortium will infuse Rs 800 crore through a preferential allotment of equity shares at Rs 167 per share and Rs 1000 crore through warrants at Rs 176 per share.

With the deal went into the lap of Munjal-Burmans, month-and-a-half-long bidding war comes to an end.

Besides, Manipal-TPG combine and IHH Healthcare, KKR-backed Radiant Life Care had also put in binding bids for Fortis. May 1 was the deadline submitting binding offers.

Reflecting the sentiment, Fortis shares fell as much as 4.9 percent on Friday before closing down 3 percent.

While Munjal is the president of Dayanand Medical College and Hospital in Ludhiana, the Burman family has healthcare enterprises such as Dabur Pharma and Healthcare at Home, reported Moneycontrol.

"We value Fortis Healthcare on a SOTP basis to arrive at a Sep-18 target price of Rs225, as we value the Indian hospitals business at 17.8x EV/EBITDA, which is on par with the Asian hospitals' peer group average, given similar demographics and growth profiles".

Currently, the company has 45 healthcare facilities (including projects under development), around 10,000 potential beds and 314 diagnostic centres in India, Dubai, Mauritius and Sri Lanka.

Fortis Healthcare is the second-largest hospital chain in the country now encompassing both the hospitals and the diagnostics businesses.

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