Binding Pact With Manipal Health Prevented Fortis From Engaging With IHH
IHH had made an unsolicited offer to Fortis Healthcare.
Fortis Healthcare Ltd. indicated its inability to engage with IHH Healthcare Berhad due to its “binding agreement” with TPG-backed Manipal Health Enterprises Ltd.
India’s second-largest hospital chain responded in the negative after Southeast Asia’s largest hospital operator expressed its interest to bid for the beleaguered healthcare company, IHH said in an exchange filing today. Last week, Bloomberg had reported that the Kuala Lumpur-based company proposed a potential offer of around $1.3 billion for Fortis Healthcare, topping the TPG-backed consortium’s bid.
Fortis has turned into a much-wanted asset as Hero Enterprise Investment Office and the Burman Family Office too offered to invest Rs 1,250 crore directly into the hospital company last week. The Fortis board is evaluating this offer. Even Ranjan Pai-led Manipal Health, whose offer is valid till April 17, sweetened its deal by offering more value to shareholders. The Fortis board will be meeting this week to look at eligible options, it said in an exchange filing today.
The interest in Fortis comes amid allegations of founders Malvinder Singh and Shivinder Singh siphoning off funds from the company. Both resigned from the board in February.
IHH had issued a strictly non-binding letter to Fortis Healthcare Board expressing its interest to participate in the hospital company and its affiliates in a suitable manner, its statement on Bursa Securities said. Fortis, however, bound by a pact with TPG, was unable to consider the proposal, not allowing IHH to start talks. The company will keep the exchanges notified should there be any developments on the matter, IHH said.