Hero-Burman consortium agrees to open rebidding for Fortis hospitals
The Fortis board had approved the Munjals-Burmans offer to invest Rs18 billion ($266.9 million) earlier this month. However, investors have been wary of the board’s choice of the underdog.business Updated: May 28, 2018 14:16 IST
Fortis Healthcare Ltd on Monday said the consortium of Hero Enterprise Investment Office and Burman Family Office, which won a five-way bidding war for the Indian firm, has permitted re-opening the bidding process, amid shareholder concerns over the board’s choice of the underdog.
Though permitted to re-open the bidding, Fortis had not yet made a decision on the matter, a spokesperson told Reuters.
The board of the cash-strapped company approved the consortium’s offer to invest Rs18 billion ($266.9 million) earlier this month.
However, investors have been wary of the board’s selection, given the consortium’s offer was much lower than those of Manipal Hospitals Enterprises or Malaysia’s IHH Healthcare Bhd.
In a letter to the company’s board on Monday, the Hero-Burman group acknowledged stakeholders’ preference for re-opening the bidding process.
“We believe that this situation may have arisen largely on account of the lack of information available to stakeholders,” Hero-Burman said.
Disapproval from shareholders became evident after they voted out a director last week. Three other directors had resigned ahead of the vote.
Fortis has been in the middle of a five-way bidding war with local and international suitors wanting to invest in the firm or buy it. Manipal sweetened its offer for a fifth time after the Hero-Burman offer was selected, and IHH extended the acceptance period for its offer.
First Published: May 28, 2018 12:39 IST