Author: Nisha Poddar

Fortis sale transaction under fire by advisory firm

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Under fire from large FIIs, Fortis Healthcare’s board has instituted an independent advisory panel to help select the best bid for the debt-ridden healthcare company.

In view of the recent developments, proxy advisory firm IiAS has questioned not just the legitimacy of the board, but also the legitimacy of the process it has adopted for the sale of the company.

In a scathing report, sourced exclusively by CNBC-TV18, IiAS said that the Fortis board is widening the trust deficit with shareholders.

The IiAS report pointed out that the independent advisory panel may not be independent.

Both Rohit Bhasin, who was appointed additional director, and Deepak Kapoor, who had been appointed head of the expert advisory committee, are closely associated with PricewaterhouseCoopers (PwC), a firm that has been the auditors of the Religare companies (companies by the same group) for a long period of time.

Standard Chartered, which was appointed to aid the expert advisory committee, was a large investor in Fortis in the past, through its private equity arm.

As of March 31, 2017, Standard Chartered Private Equity (Mauritius) III Limited owned a 3.05% stake in Fortis.

The advisory firm’s main concern was that the advisory firm was looking at only two bids, IiAS Founder Amit Tandon told CNBC-TV 18, and added that everyone should be allowed to bid for Fortis.

Adding that investors would also question the validity of the sale process, he said Fortis should pause and make the process transparent.

A footnote in the report stated that IiAS recommended voting against the appointment of Lt. Gen. Tejinder Singh Shergill as an independent director to the board of Fortis, at their recent postal ballot.

Renuka Ramnath, appointed a member of the expert advisory committee, is an independent director on the board of IiAS .

Recently, shareholders East Bridge Capital and Jupiter Asset Management, which have a combined stake of 12% stake in Fortis, sought to dismantle the board and called for an EGM for the formation of a new board.

“Investors have questioned the legitimacy of Fortis Healthcare Limited’s (Fortis) existing board because all its current members have had past tenured relationships either with the Singh brothers, or with companies of the group,” IiAS said.

Linking the pattern of putting close aides in decision making positions, IiAS  advised was to set up a committee to help the company decide which of the five bids best suited Fortis.

In its last board meet announcement Fortis clearly stated that only binding bids will be accepted.

Currently the TPG-Manipal & Munjal-Burman bids are binding in nature. Burman-Munjal has revised their offer and made it binding without due diligence just ahead of the last board meet.

This leaves global players IHH, Fosun with non-binding offers. The deadline for submitting final binding bids ends on April 24.

Sources said that IHH, Fosun, KKR-Radiant may come up with a binding offer by end of the deadline.

The board of Fortis has decided to meet on April 26 to take a final decision after the advisory board submits its views.

IiAS ended the note questioning the legitimacy of the Fortis sale process with a final warning, “If the board continues its current path, we may see another unprecedented event: a Indian class-action suit.”

Institutional Investor Advisory Services India Limited (IiAS) is a proxy advisory firm that provides voting recommendations on events such as annual general meetings and postal ballots for over 600 companies.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Exclusive: Manipal-TPG holds the edge in race to buy Fortis Healthcare

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Manipal Hospitals, backed by private equity giant TPG, has the upper hand over four other bidders in the race to acquire Fortis Healthcare, as the deadline for submitting the binding offer nears, people familiar with the matter told CNBC-TV18.

The Manipal Hospital-TPG consortium retains ‘right to match’ the highest bid for Fortis Healthcare by way of their earlier agreement with the Fortis board.

Sources said that if a higher bid comes on April 24,  a day before before advisory committee meets, the ball will be in Manipal-TPG’s court to either exercise its ‘right to match’ in five days or let the Fortis board meet go ahead if they do not want to counter the bid.

Manipal-TPG and Fortis Healthcare declined comment to CNBC-TV18’s query.

As per the agreement, Manipal-TPG would get five days to match their offer in case a new binding offer comes in for Fortis by April 25 when the advisory panel will evaluate all binding bids.

Fortis Board had requested Manipal-TPG to waive of their ‘right to match’, but the group refused to do so, people said, requesting anonymity.

On Monday, Fortis Healthcare said that Hero Enterprise Investment and the Burman family have extended the validity of their improved, joint binding offer to invest Rs 1,500 crore in the company till May 4, PTI reported.

On April 18, Hero-Burman consortium improved their binding offer with a proposal to invest Rs 1,500 crore directly at a valuation of Rs 161.6 per share, from the earlier Rs 1,250 crore. They had stated that their improved offer was valid for five working days.

In the letter to the Fortis board, the two partners said that in the wake of a formation of an advisory committee to evaluate binding offers and recommend to the board for consideration by April 26, they were extending their deadline.

“…We are hereby extending the validity period till May 4, 2018 or as otherwise extended by us in writing and the term of validity period in the improved offer letter should be construed accordingly,” the letter said

Sources do not rule out a binding offer from KKR-Radiant which had entered the fray, post the Fortis board meet.

Malaysian giant IHH and Chinese company Fosun International had offered a non-binding bid but may find it hard to give a binding offer without time for due diligence, sources said.

Last week, the Fortis board had appointed an advisory committee to evaluate the offers made to buy out the company. The committee is headed by Deepak Kapoor, Former Chairman and CEO of Price Waterhouse Coopers, India.

On April 26, the board will decide the final winner for Fortis Healthcare after taking the opinion from the committee.

CNBC-TV18 was the first to highlight the severe deficiencies in the composition of the Fortis Healthcare board and argued that the board will have to appoint an independent committee to advise on the bids.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Race for Fortis: Radiant Life Care enters the fray

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The race to acquire debt ridden Fortis Healthcare has further intensified with Mumbai-based Radiant Life Care, backed by buyout firm KKR, entering the fray as the fifth bidder.

The Radiant made a non-binding offer for the hospitals business of Fortis for 10,000 crore. It’s an all cash deal with a window of discussion available for an upfront amount.

Radiant plans to buy the hospital business of Fortis which includes RHT, the Singapore listed Trust.

Currently, Radiant’s offer is the highest bid at Rs 165 per share of Fortis and could be compelling if they can offer a binding bid, which needs due diligence. Radiant seeks a quick due diligence process in the stipulated time.

Radiant Hospitals, which raised $200 million from private equity firm KKR last year has been looking for hospital assets with minimum 500 beds to acquire and expand its operations. Currently it is in possession with two hospitals in Delhi and Mumbai, reported  Economic Times.

The Fortis board on Thursday appointed an advisory committee  headed by Former PWC chairman Deepak Kapoor to evaluate the offers made to buy out the company.

The board will take a final decision on April 26, based on recommendation from the advisory committee.

Fortis’ hospital business now has five suitors in the fray. The first was a revised offer from Manipal Hospital Enterprises and the second was a joint binding offer from Sunil Kant Munjal’s Hero Enterprise Investment Office and the Burman family of Dabur. IHH Healthcare of Malaysia also threw its hat in the ring with a non-binding expression of interest. The last one was from China’s Fosun International.

Earlier, the board had came under fire after East Bridge Capital Master Fund led investors sought to dismantle the Fortis Healthcare board.

Defending East Bridge’s call for emergency meeting, Brian Tempest, director, Fortis Healthcare said East Bridge Capital is a very valuable shareholder and with over 10% stake it has the right to call for an emergency meeting.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

Bharti Infratel, Indus Towers merger in final stages

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Mega merger of Bharti Infratel and Indus Towers is in the last lap and an announcement is expected soon, sources with direct knowledge told CNBC-TV18.

The final contours being worked out values the merged entity above $16 billion. Sources share that Bharti & Vodafone will be the joint promoters of the merged tower company with over 1,60,000 telecom towers.

Idea Cellular will be a big beneficiary which is likely to gain over $1 billion by selling its 11.15% stake in Indus. Private equity firm Providence will also exit its 4.85% stake in indus Towers as part of the deal.

KKR which holds 10.3% stake in Bharti Infratel will continue as a minority shareholders in the merged company with over 6% stake.

A source said, “This new structure gives an early solution to the long pending complicated deal between the two tower companies. But, Bharti, Vodafone may have a one year lock-in due to their promoter status.”

CNBC-TV18 reached out to Bharti Group, Vodafone, Idea Cellular, KKR, Providence, all declined to make any comment on the deal development.

Merger of Bharti Infratel & Indus Towers was agreed upon by all the parties involved after the earlier deal of KKR, CPPIB combine buying majority stake in Bharti infratel and then in turn buying Indus Towers failed to materialize.

Bharti Infratel is cash rich and has close to Rs 6500 crore cash on its books which may be used to give an exit to Idea Cellular as part of the deal. Idea Cellular is currently in the process of executing the merger with Vodafone India which was announced a year ago.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow

IHH makes non-binding offer for Fortis Healthcare

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

Malaysia-based IHH Healthcare Bhd  has taken the plunge and made a much anticipated counter offer for Fortis Healthcare, according to sources, as the fight for Fortis Healthcare intensified.

IHH reached out to the Fortis board last evening with a non-binding offer. The company is looking to conduct a due diligence to give a definitive bid to buy Fortis Healthcare.

The Fortis Healthcare stock gained in trade on the back of the counter offer. Sources said, given that, IHH has proposed to buy Fortis for around $1.3 billion, the share price is likely to be up to Rs 160/share.

IHH’s offer is at a premium to the binding bid given by Manipal Hospitals backed by PE firm TPG.

When contacted, Fortis Healthcare declined to comment.

An IHH spokesperson also declined to comment. “We decline to comment. We will make appropriate announcement(s) should there be any material developments.”

IHH’s offer to buy Fortis Healthcare comes soon after Manipal Hospitals sweetened its offer to make the deal palatable to the shareholders of Fortis Healthcare.

Reports suggest that East Bridge Capital, along with other minority shareholders, had opposed the original deal announced by Fortis and Manipal.

IHH’s investments in India:

IHH was the second largest shareholder in Apollo Hospitals, with a 10.85% stake in the company, and had invested $44.23 million into the healthcare company in 2005.

By May 2017, however, IHH exited the entire investment in Apollo with returns of $288 million, an amount worth about six times its initial investment. The company maintains two joint-venture facilities with Apollo in Kolkata and Hyderabad.

In April 2005, IHH had taken a majority stake in Continental Hospitals, a 750-bed super specialty facility, for Rs 300 crore. It was the first direct acquisition for IHH in the country.

IHH also acquired a 73.4% stake in the Hyderabad-based Global hospitals for Rs 1,284 crore, in August 2015 . Global has around 5 hospitals in Hyderabad, Mumbai, Bengaluru, and Chennai, with a total of about 1100 beds.

Ironically, IHH had acquired the Parkway Pantai Group, the crown jewel in its investments abroad, after a prolonged battle with Fortis.

Globally, IHH has around 8,000 beds across 45 hospitals in 10 countries. The company merged all healthcare assets, including Pantai in Malaysia, before public listing in 2012.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow