Munjals, Burmans bid jointly for Fortis

Mumbai, Apr 13: The race to acquire India’s second largest hospital chain, Fortis Healthcare, took an interesting turn on Thursday with Sunil Munjal-led Hero Enterprise and the Burmans of Dabur joining hands to offer a Rs 1,250 crore investment in the company. The development comes even as the Fortis board has approved a takeover offer from Manipal Hospitals and is also fielding a non-binding rival offer from Malaysia’s IHH Healthcare Berhad.
The Munjals and Burmans already own 3% in the troubled hospital network rendered without a promoter after Shivinder and Malvinder Singh quit the board in February.
The combine has proposed a two-stage transaction valuing Fortis at Rs 156 per share, just above Manipal’s offer at Rs 155 apiece.
The family offices of the two prominent Delhi business groups plan to infuse Rs 500 crore into Fortis immediately through a preferential offer and follow up with another Rs 750 crore through a similar offer within three weeks. “The said proposal is under evaluation by the company,” Fortis said in a statement to the exchanges. “The utilisation of proceeds from this funding should only be used for paying dues to Fortis’s employees, repayment of loans and payment to pressing creditors,” the bid document noted.
“This offer has been made to immediately infuse funds into the liquidity-starved company,” Sunil Munjal, promoter of Hero Enterprise, told TOI. He said that their offer was the most attractive one, and a fairly clean and straightforward proposition, which could be concluded faster than any other offers on the table. “We will put money into the company. We are not calling for taking out assets. We intend to work with the existing system by putting in liquidity that is in short supply,” Munjal said.