Munjals, Burmans make improved Rs 1,500 crore offer ahead of Fortis board meet

The Munjals and Burmans in a joint letter said, the offer is “faster to implement and without any due diligence. We are proposing to invest Rs 1,500 crore directly in the company”.

Fortis Healthcare on Thursday said it has received an improved binding offer from Hero Enterprise Investment Office and Burman Family Office to invest Rs 1,500 crore directly in the company, ahead of its scheduled board meet today.

“The company has received an improved binding offer from Hero/Munjals and Burmans to invest directly into the company,” Fortis Healthcare said in a regulatory filing.

Spelling out the details of their offer, the Munjals and Burmans in a joint letter said, the offer is “faster to implement and without any due diligence. We are proposing to invest Rs 1,500 crore directly in the company”.

The Munjals and Burmans have offered to invest Rs 500 crore through preference issue of equity shares and Rs 1,000 crore through preferential issue of warrants, based on the current business and financial position of the company.

Meanwhile, in a late night filing on Wednesday, Fortis said it has also received a supplemental proposal from Malaysia’s IHH Healthcare Bhd.

“As part of the IHH proposal and subject to satisfactory completion of due diligence..We are ready to infuse Rs 4,000 crore through a preferential allotment of equity shares at a price not exceeding Rs 160 per share which will fund the buyout of RHT Health Trust assets as well as provide immediate liquidity towards working capital and infrastructure upgrades,” IHH said.

“Notwithstanding the foregoing, IHH remains flexible to jointly working with the existing shareholders of the company towards solving the company’s funding requirements,” it added.

The Munjals and Burmans have offered to invest Rs 750 crore upfront.

Group entities of Hero Enterprise Investment Office led by Sunil Kant Munjal and the Burman family of the Dabur Group currently hold around 3% stake in the healthcare chain.

Last week, Fortis had an “unsolicited binding offer” from Hero Enterprise Investment Office and Burman Family Office to invest Rs 1,250 crore in the company through preferential allotment route.

As per the improved offer letter, allotment and pricing for the preferential issue of equity shares for Rs 500 crore shall be as per Sebi ICDR guidelines or Rs 156 per share, which is higher.

Allotment and pricing for the preferential issue of warrants for Rs 1,000 crore shall be as per Sebi ICDR guidelines or Rs 161.60 per share, which is higher, it added.

The board of directors of the company is scheduled to meet today to consider all the options.

The offer letter stated that utilisation of proceeds from the preferential issue of equity shares for Rs 500 crore shall only be for the purpose of payment of employee dues, repayment of loans which have matured and payment to the most pressing creditors and lenders.

“We seek two board seats, given the sizeable investment, and to generally act in the interest of stakeholders,” it added.

IHH Healthcare Bhd, Manipal Health Enterprises Pvt Ltd, Burmans and Munjals (jointly) and Chinese firm Fosun Health Holdings are in the race for buying Fortis.

IHH offered a price of 160 per share which valued the company at Rs 6,061 crore.

The Malaysian firm’s offer had come a day after Sunil Kant Munjal-led Hero Enterprise Investment Office and Burman Family Office offered to invest Rs 1,250 crore in the healthcare chain at up to Rs 156 per share.

Fortis has also received an unsolicited non-binding expression of interest from Fosun Health Holdings Ltd, an arm of Fosun International Ltd, with a proposal of primary infusion at a price up to Rs 156 per share up to a total investment of USD 350 million (over Rs 2,295 crore).

Manipal had raised its offer for Fortis last week to Rs 155 per share by valuing the hospital business higher at Rs 6,061 crore, from Rs 5,003 crore initially.