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Fortis in five-way battle for control as KKR-backed Radiant Life makes offer

KKR-backed Radiant Life Care has offered to acquire at least 26% stake in Fortis Healthcare (FHL) at Rs 126 per share, excluding its diagnostic business SRL.

business Updated: Apr 20, 2018 13:39 IST
Press Trust of India, New Delhi
Fortis Hospitals,Fortis,Radiant Life Care
To fulfil immediate cash requirement, Radiant Life Care said it is prepared to purchase FHL’s interest in FMRI, Gurugram, and Fortis Shalimar Bagh in New Delhi.(Parveen Kumar/Hindustan Times)

The battle for control of Fortis Healthcare Ltd intensified after KKR-backed Radiant Life Care Private Ltd entered the fray with an offer to buy more than a quarter of the cash-strapped company’s hospital business.

In its non-binding offer, Radiant, the fifth suitor for Fortis, proposed on Thursday to make an investment and re-structure the company, Fortis said in a filing that had Radiant’s offer letter attached to it.

“I think now, we will have revised offers coming,” said Gaurang Shah, head investment strategist at Geojit Financial Services.

Fortis also said on Thursday that it set up an advisory committee to evaluate binding bids. The committee is expected to give its recommendation to the board on April 26.

The company has become the target of a takeover battle that includes offers from China’s Fosun International and Malaysia’s IHH Healthcare. Both offers, however, are non-binding.

The other two offers - from local rival Manipal Health Enterprises and a consortium of two prominent Indian business families, Hero Enterprise and the Burman Family Office - are both binding.

All the offers value Fortis within a tight range of $1.2-$1.4 billion.

Latest suitor

Radiant has proposed to spin off the hospital business from the larger company to form a new company, which will exclude Fortis’ stake in Indian diagnostics chain SRL Ltd.

The all-cash offer to shareholders of the proposed new company is Rs126 per share, Radiant said. This offer values the whole of Fortis at Rs165 per share, or Rs 85.58 billion ($1.30 billion), including the SRL stake.

The offer is contingent on, among others, Radiant being able to buy 26% or more shares of the proposed new company.

Fortis shares were up 1% on Friday afternoon at Rs 150 rupees, in a broader market that was down 0.3%.

The keen interest in Fortis, which runs about 30 hospitals in India, comes as companies and investors look to tap soaring demand for private healthcare in the South Asian nation against the backdrop of a stretched public healthcare system.

Private hospitals could also be boosted from Prime Minister Narendra Modi’s plans to implement a healthcare programme aimed at providing insurance cover to about half of India’s population.

KKR & Co owns a 49% stake in Radiant with its $200 million investment in 2017, Radiant said.

First Published: Apr 20, 2018 13:16 IST