Fortis Healthcare sets up expert committee to evaluate all bids

Hospital chain Fortis Healthcare said it has set up a special committee to evaluate the bids submitted by various parties to invest money into the company.

It said the company has received binding offers from the Manipal – TPG consortium and the Munjal & Burman family offices, while non-binding expressions of interest has been received from IHH Healthcare Berhad and Fosun Health Holdings Limited.

To evaluate the offers, said the board, an expert committee will be formed.

“The advisory Committee will be Chaired by Mr Deepak Kapoor, Former Chairman and CEO of PwC India,” the company said.

Kapoor has been associated with PwC for 39 years and has served in various leadership roles in the organization in India and overseas.

He was a member of the PwC Global Strategy Council and has also led the Deals practice for PwC India.

The advisory committee will also have other independent members of eminent repute, the company added.

Interestingly, the statement comes despite the company announcing a deal with the Manipal TPG group to merge its business. It today said it is the fiduciary duty of the board of directors to evaluate all options, before closing on one.

“The Board has over the last many months been involved in deliberations for a potential transaction with the objective of partnering with strong players that would help the Company strategically and financially and towards this end has engaged with several potential investors before entering into a transaction with Manipal / TPG consortium on March 27, 2018. In exercise of its fiduciary duties, the Board has decided to evaluate the binding offers and has appointed an advisory committee,” it said.

From the statement of the company, it looked like only the binding offers — those from Manipal TPG and the Munjal-Burman combine — would be examined by the committee.

“In order to evaluate the binding offers, the advisory committee will, after due evaluation and post taking into account the independent view of Standard Chartered Bank, make a final recommendation to the Board by April 26, 2018. Basis the decision by the Board, the final proposal will be put forward to the shareholders for their approval,” the statement said.

The board reiterated that Fortis Healthcare is a “fundamentally sound company with a good business model.”

It has been in a bit of financial turmoil after it was revealed that its promoters, Malvinder and Shivinder Singh, transferred much of the company’s liquid assets to entities under their control.

“The Company has been facing hurdles that have precipitated and have caused uncertainty and ambiguity amongst all stakeholders,” the board said.

“We firmly believe that it would be the responsibility of the Board to direct and guide the Company in a manner that brings conformity and certainty to the ongoing process.”

“We are confident that at the end of this process we would have enabled the Company in meeting its long term objectives of growth, profitability and shareholder value enhancement,” it added.

The company runs 45 healthcare facilities (including projects under development) in India, Dubai, Mauritius and Sri Lanka with approximately 10,000 potential beds and over 374 diagnostic centres.