(Bloomberg) -- IHH Healthcare Bhd. isn’t giving up its pursuit of Fortis Healthcare Ltd., the Indian hospital chain that’s becoming the center of a takeover battle.
IHH, Asia’s most valuable hospital operator, has asked Fortis for three weeks to complete due diligence before making a potential binding offer, people with knowledge of the matter said. It sent a letter to Fortis’s board Monday with the due diligence request following its cash purchase proposal last week valuing the company at as much as $1.3 billion, according to the people, who asked not to be identified because the information is private.
The letter says IHH is seeking information related to investigations of Fortis by India’s fraud watchdog and stock market regulator, the people said.
Suitors including Chinese conglomerate Fosun International Ltd. are vying for Fortis after the company’s founders lost control of their shareholdings due to mounting debt. India’s Fortis said it couldn’t engage the proposal from IHH because it had already entered into binding agreements with TPG-backed Manipal Health Enterprises Pvt, a Monday exchange filling from the Malaysian firm shows.
IHH is also seeking updated financial results and information related to the potential impact of Japanese drugmaker Daiichi Sankyo Co.’s attempts to collect a $550 million arbitration award from Fortis’s founders, said the people.
A representative for IHH declined to comment beyond the company’s Monday exchange filing. The board of Fortis will meet Thursday to consider all proposals, a spokesman of the company said in a text message, without specifically responding to queries about IHH’s second letter.
Fosun proposed investing as much as $350 million for a stake in Fortis, according to a letter Tuesday to Fortis’s board. Fosun said in its non-binding proposal it would invest at a price of up to 156 rupees a share, and would restrict its holding in Fortis to below 25 percent.
Manipal Health offered to spin off Fortis’s hospital operations and merge them with its own in a binding deal valuing the company at about 155 rupees per share. IHH said it’s willing to pay as much as 160 rupees a share in cash, though its offer is not binding and contingent on more due diligence.
Another bid by two Indian business families proposed to jointly invest a total of 12.5 billion rupees ($190 million) through a preferential share allotment, with the first 5 billion rupees submitted as a binding bid of at least 156 rupees a share, and rest subject to a due diligence within three weeks.
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