PC: India Today
Even as the clock ticks down to the bid submission deadline set by Fortis Healthcare Limited (FHL), which is today afternoon, revised proposals continue to pour in.
The Munjal-Burman combine has just presented the FHL board with a "revised investment proposal" to invest Rs 1,800 crore directly, without any due diligence. Its previous offer proposed a direct infusion of Rs 1,500 crore, so the new deal is significantly sweeter.
Of the proposed investment amount, Rs 800 crore will be invested through preferential issue of equity shares and the balance through preferential issue of warrants, based on FHL's current business and financial position.
"Hence, including the warrant subscription amount, our upfront investment into the Company (FHL) will be Rs 1,050 crores," said the offer letter from Hero Enterprise Investment Office led by Sunil Kant Munjal and Burman Family Office. It added that the allotment and pricing of the preferential issue of equity shares will be at Rs 167 per share, "or as per SEBI ICDR guidelines, whichever is higher", while that for the warrants shall be at Rs 176 per share, or as per the said guidelines. "The exercise of the warrants by us will be timed in a manner that will enable the Company to meet its liquidity requirements," said the offer letter.
In exchange, the Munjal-Burman combine wanted three board seats. The suggested action plan outlined in the letter also proposed a strategic sale of the SRL Diagnostics unit after divesting FHL's stake in it.
Significantly, the letter stated that its offer is valid till May 15, and if FHL allowed any other suitor to conduct due diligence within this window, the new proposal will be subject to findings of their own similar exercise.
Earlier this morning, Malaysian hospital chain IHH Healthcare Berhad also upped its offer for FHL by 9 per cent. "We now wish to reiterate our seriousness and commitment to an investment in the Company [FHL] by enhancing the Revised IHH Proposal," it said in a letter to FHL's board of directors. The fresh proposal offers an immediate equity infusion at a share price of Rs 175 apiece, up from its previous offer at Rs 160 per share.
The "Enhanced Revised Proposal" further proposed a subsequent equity infusion subject to satisfactory completion of the due diligence process. The letter added that all other terms and conditions of the previous offer shall apply and set a deadline of May 15 for FHL to revert, post which the new offer will stand withdrawn. This, incidentally, is the fourth offer it has made to FHL in three weeks.
Clearly, the FHL board's decision to postpone the deadline for new/revised bid submissions has paid off big time. The big question is whether TPG-Manipal will now be prompted to further sweeten its own offer on the table. The expert advisory committee set up by FHL to evaluate the binding bids is now scheduled to share its recommendations with the board ahead of its May 10 meeting.