TPG backed Manipal to merge with Fortis, deal expected soon

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New Delhi, Mar 27: Fortis Healthcare on Tuesday said it has received an unsolicited non-binding indication of interest from Manipal Health Enterprises for possible transaction with the company on March 23.
“The said proposal is still under evaluation by the management and no firm decision in this regard has been taken by the board,” Fortis said.
Fortis did not disclose any financial details of the proposal.
Sources said that a consortium led by US-based private equity investor TPG Capital and Manipal Hospital Enterprises may soon close the deal to buy embattled healthcare provider Fortis Healthcare.
“The deal could be announced anytime this week,” said a person aware of the development who didn’t want to be named.
The deal will be structured in a way – that the new owners will be insulated from legal liabilities that may arise of ongoing investigations against the company by regulatory agencies, sources said.
Fortis is under investigation by SEBI and Ministry of Corporate Affairs for any possible violation of corporate laws after the company announced that the former promoters have taken out Rs 473 crore out of the company through alleged questionable inter corporate deposits.
CNBC-TV18 reported that Fortis Board is likely to meet on Tuesday to approve the deal.
A Fortis spokesperson said that he was not aware of the board meet and added that he will not be able to comment on “market speculation” referring to the TPG-Manipal deal.
TPG declined to comment.
“They (Fortis) don’t need to (inform minority shareholders) at this stage. The company has not made any formal announcement (about the deal) and these are just speculation in media,” said Shriram Subramanian of InGovern Research – the Proxy advisory and corporate governance firm.
There is nothing wrong with the asset sale, as long as the interest of minority shareholders is protected, Subramanian said.
Earlier, Economic Times had reported that Fortis would first demerge its healthcare unit into a separate listed entity which will eventually be merged with Manipal Health.
Manipal will get listed on the stock exchange as a result.
In the second step, the Manipal-TPG consortium is likely to acquire a 51 percent stake in diagnostic chain SRL from the existing private equity investors and Fortis.
As on March 31, 2017, Fortis held a 62.5 percent stake in SRL. The other investors in SRL include International Finance Corporation, and private equity firms Jacob Ballas and Siguler Guff & Company.
Private-sector lender Yes Bank holds a 15.14 percent stake in Fortis Healthcare as it acquired the pledged shares after promoter group companies defaulted.