Fortis Board to look at 'all eligible options' this week

Adjust Comment Print

On April 12, Hero Enterprise promoted by Sunil Munjal and the Burman family had offered, in a joint letter, to invest Rs 1,250 crore directly in Fortis Healthcare, to bail out the cash-strapped company.

The Board of Directors of Fortis Healthcare Limited will meet later this week to look at all eligible options related to offers made for its hospitals business and determine the future course of action, according to an official release.

On the other hand, Fortis Healthcare stated that "the Board of Directors of the Company have not yet made a decision".

IHH had last week joined the race to acquire India's 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. Sources said that the offer from the Hero Enterprise-Burman Family office is unlikely to find favour with the board as it does not provide for the future growth path of the company that is operating in the capital-intensive healthcare business. It will be interesting to watch how the board will act given the fact that Fortis has also signed a binding agreement with Manipal and TPG.

Meanwhile, IHH advised its shareholders or investors to exercise caution and seek appropriate independent advice when dealing in IHH shares.

IiAS believes the current board can get additional support in assessing the three bids and coming to a decision among the complex sets of pulls and pressures, without necessarily waiting for board expansion.

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".

The battle for the control of Fortis Healthcare is expected to intensify as Malaysian giant IHH Healthcare plans to make a hostile bid to buy a majority stake in the Indian hospital chain if its board doesn't consider its expression of interest (EOI) - presented on April 11 - favourably.

"While the current situation at Fortis is unfolding in as dramatic a fashion as Sholay (Hindi movie) did, its fall from grace is perhaps similar to that of Satyam Computer Services", it said, The decision on which bid to accept can not be driven by valuation alone as there are questions regarding subsequent control and the issues regarding the current promoters' need to be dealt, it added.