China’s Fosun enters the race for Fortis

Makes an unsolicited offer to buy shares at ₹156 per share.

April 18, 2018 12:00 am | Updated 12:02 am IST - CHENNAI

Vehicles drive in front of the headquarters of Fosun International in Shanghai. File

Vehicles drive in front of the headquarters of Fosun International in Shanghai. File

The race for Fortis Healthcare Limited has intensified with the company receiving an unsolicited non-binding expression of interest from Fosun Health Holdings Limited, a wholly-owned subsidiary of Fosun International Limited. It is a company listed on the Hong Kong Stock Exchange.

The offer comes with a proposal of primary infusion at a price up to ₹156 a share, subject to due diligence to be completed within three weeks, up to a total investment of $ 350 million (including a preliminary investment of up to ₹100 crore). Fortis has just informed the stock exchanges of this unsolicited offer from Fosun.

Interestingly enough, the Fosun offer comes just a couple of day before the board of Fortis meets to decide on the bids. The board is scheduled to convene on April 19.

Fosun had stated in its offer letter it could immediately provide ₹100 crore to Fortis to take care of its immediate cash needs within the next 45 days, including the option of immediately subscribing to a debt instrument. This money could be infused provided Fortis agreed to extend a short one month of exclusivity to undertake due diligence and negotiate the deal, the Chinese firm said.

Fosun said its $350 million investment proposal won't enable it to own 25% or more securities of Fortis. This offer was subject to due diligence, which would be completed in three weeks, it added.

Fosun said it would seek rights, including board seats. Fosun also said it had adequate funds and won't require external funds. However, it would mull a combination of internal and external funds for taxation and other purposes, the Chinese firm said.

The race for Fortis took an interesting turn when Malaysia’s IHH Healthcare Berhad offered to buy the company at ₹160 per share.

Earlier last week, Fortis received a sweetened offer from Manipal Hospitals Enterprises Pvt. Ltd. and TPG at ₹155 per share.

Hero Enterprise Investment Office and the Burman Family Office have also made a binding offer to invest a total of ₹1,250 crore through a preferential share allotment at at least ₹156 a share.

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