Fortis Healthcare jumps to two-month high after IHH raises offer
Fortis Healthcare Ltd. shares extended their best monthly gain in more than three years after IHH Healthcare Bhd. and two Indian tycoons revised their offers in the race for the country’s second-largest hospital chain.
The stock climbed as much as 5.3% to Rs160.50 intraday, before settling to Rs 158.80, up Rs 6.40. Fortis’s shares gained 24% last month, the best performance since February 2015.
Asia’s most-valuable hospital operator has offered to make an immediate equity investment at 175 rupees ($2.6) a share, up from its previous bid of 160 rupees apiece, and subsequently invest more after completing a due diligence. The Munjal family’s Hero Enterprise Investment Office and Burman Family Office also submitted a revised proposal, raising the amount they will invest in Fortis to Rs18 billion.
At least four suitors had expressed interest in Fortis, after private equity firm TPG-backed Manipal Health Enterprises Pvt. made the first move in March. Manipal Health now has time till May 6 to revise its offer before the board meets May 10 to consider binding bids.
The two Indian business families, Munjals and Burmans, have offered to invest Rs8 billion through a preferential share allotment at 167 rupees apiece and another Rs10 billion via issue of warrants at Rs176 apiece.
The fight over Fortis kicked off after the shareholding of its founders, Malvinder and Shivinder Singh, slid to less than 1% as lenders seized stock they’d put up as collateral. The brothers resigned from the board in February, a day before Bloomberg News reported they had taken at least 5 billion rupees out without board approval.
India’s fraud watchdog and market regulator have since started investigations to see if there were any financial irregularities at the company.