Fortis Healthcare gets Munjal-Burman nod for fresh bidding

With Hero Enterprise Investment Office-Burman Family Office combine giving its consent to re-initiate the bidding process for Fortis Healthcare Ltd, the fourth round of bids for the insolvent company will once again turn out to be a closely contested affair.

In a letter to Gurugram-based hospital chain, Munjals-Burmans have expressed “deep anguish and regret” while allowing re-opening of yet another round of contest.

In the recent past, Manipal Health Enterprises-TPG Capital (MHE-TPG) consortium, IHH Healthcare Berhad, Munjals-Burmans, KKR backed Radiant Life Care and Fosun Health Holdings have been in the fray for the Fortis’ healthcare asset.

The communication from Munjals-Burmans comes after shareholders in an Extraordinary General Meeting voted out independent director Brian Tempest on May 22 and other three directors Harpal Singh, Lt. Gen. Tejinder Singh Shergill and Sabina Vaisoha. The board had raised objection to the directors’ decision to have opted for Munjals-Burmans over other competitors.

Instead, Fortis shareholders have voted Suvalaxmi Chakraborty, Ravi Rajagopal and Indrajit Banerjee as independent directors on the board.

“Whilst we have been awaiting the dispatch of the notice to shareholders for approving out investment offer, we have been continuously reflecting on the current situation relating to the Company, and it appears that there may be indecision on the part of the Company regarding the bid process, which we understand could be on account of a few shareholders indicating their preference to the Company for re-opening of the bid process,” read the letter co-signed by Sunil Kant Munjal and Anand C. Burman.

According to them, the subject of rebids must largely have been on account of “lack of information available to stakeholders.”

Whereas the stakeholders are of the opinion that there were better options available at hand with the Fortis Healthcare’s Board, which prompted them to push the management towards re-opening the bidding process.

In a separate statement, Munjal blamed Fortis Healthcare’s “indecision” on account of a few shareholders indicating their preference for reopening the bid process.

Earlier certain shareholders were against Fortis Healthcare deciding to go with MHE-TPG stating that their initial bid was undervalued and not in the interest of all the stakeholders. This led to counter offers from competitors and the stakes were considerably raised by everyone in the fray. 

The first round of offers went on for around 18 months that saw interests from MHE-TPG, IHH Healthcare and Abu Dhabi-based VPS Healthcare. 

While the second round of bids that were on for the last couple of months witnessed heated contest among Munjals-Burmans, IHH Healthcare, MHE-TPG, KKR backed Radiant Life Care and Fosun Health Holdings. 

The third round involved formation of Expert Advisory Committee wherein MHE-TPG, Munjals-Burmans and IHH Healthcare were in the fray.

Earlier this month, DNA Money had reported the possibility of another round of bidding for Fortis Healthcare.

Apart from a section of shareholders, Yes Bank too in a letter to Fortis Healthcare had sought for a review of their decision to go with Hero Enterprise Investment Office-Burman Family Office’s offer. 

Earlier this year, Yes Bank had invoked its debt into the health asset into equity. After offloading 2.17% stake in the open market, Yes Bank still continues to hold 15.14% in Fortis Healthcare.

Fortis Healthcare’s board of directors is scheduled to meet on May 30 to consider and approve financial results for the quarter and financial year ended March 31, 2018.