May 11: The Burman and Munjal families, representing Dabur and Hero respectively, are said to have emerged winners in the race to acquire Fortis Healthcare. The duo has managed to overcome the proposals put forward by TPG-backed Manipal Health Enterprises Pvt. and KKR-backed Radiant Life Care Pvt. to acquire Indian’s second-largest hospital chain.
According to reports, the Fortis board has chosen the joint proposal from Hero Enterprise Investment Office and Dabur Family Office. The final decision would although rely on the decision from the shareholders. A change in the board also appears imminent with experts opining that the shareholders were looking for a shuffle in the character of Fortis Healthcare rather than just a financial infusion.
As per the winning proposal from Hero and Dabur, the duo will infuse Rs 8 billion ($119 million) of new equity, priced at Rs167 per share. Additional warrants worth Rs 10 billion would also be purchased according to the filing, giving them the option to buy more stock at a price of Rs176 per share.
Fortis’s board had previously agreed to a deal with Manipal Health. The proposal was however unravelled, intensifying the tussle among the bidders including Malaysia’s IHH Healthcare Bhd. and China’s Fosun International Ltd. apart from Radiant and Hero-Dabur. Ranjan Pai, chairman of Manipal Education and Medical Group, expressed disappointment in the decision made by Fortis board, but also wished the best to the new bidders.
The battle for acquiring Fortis commenced earlier this year after its founders having lost control of the shareholding due to debt. Additionally, they also faced investigations from the authorities in relation to allegations that millions of dollars were taken out of the company. Fortis Healthcare is operator of one of the largest chain of hospitals in the country, second only to Apollo Hospitals Enterprise Ltd.