Hero, Dabur offer to invest Rs 1250 crore in Fortis

Hero, Dabur offer to invest Rs 1250 crore in Fortis

The race to acquire Fortis Healthcare Ltd is heating up with the announcement that the hospital chain has received an unsolicited binding offer from Malaysia's IHH Healthcare Berhad - the third bidder to have entered the fray to buy Fortis.

The new offer values Fortis' hospital business at ₹6,061 crore or ₹116 a share.

But even without it, an under-resourced Indian public health system has helped Fortis - with around 30 hospitals across India - and rival private-healthcare companies such as Manipal and Apollo Hospital Enterprise Ltd grow rapidly in recent years, tapping into demand for better healthcare. The Fortis Healthcare is said to have only Rs 700 million in liquid cash. IHH declined to comment today and Fortis did not respond to a request for comment. The proposal, which is subject to certain conditions, includes an immediate investment of 5 billion rupees and 7.5 billion rupees after diligence is completed within three weeks.

"As part of the proposal, IHH will work with the board and the management of the company to identify optimal financing solutions to enable the company to fulfil its commitments during the challenging phase and stay afloat", the proposal said. Hero Enterprise Investment Office and the Burman Family Office have made a binding offer to invest a total of ₹ 1,250 crore through a preferential share allotment at at least ₹156 rupees a share, according to a Fortis exchange filing on Thursday.

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Utilisation of proceeds from this funding shall only be for the purposes of payment of employee dues, repayment of loans which have matured and payment of pressing creditors and to monitor these, a board seat shall be given to investors, it added. If Fortis board rejects the approach, IHH will consider taking its offer directly to the company's shareholders, according to the people.

Earlier this week, MHEL increased its offer to buy FHL's hospital by about 21 per cent in response to opposition by minority shareholders who complained that the deal was undervalued.

Manipal, the first one to throw the hat, has revised its offer from Rs140 per share to Rs155 per share.

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