KKR-backed Radiant Life Care enters race to acquire Fortis

A Fortis hospital building in New Delhi, India. Fortis has become the target of a takeover battle with five suitors keen on the Indian hospital chain.
A Fortis hospital building in New Delhi, India. Fortis has become the target of a takeover battle with five suitors keen on the Indian hospital chain.PHOTO: REUTERS

BENGALURU • The battle for control of India's Fortis Healthcare intensified after KKR-backed Radiant Life Care 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 restructure 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 Geojit Financial Services' head investment strategist Gaurang Shah.

Fortis also said on Thursday that it had 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 Burman Family Office - are both binding.

All the offers value Fortis within a tight range of US$1.2 billion (S$1.6 billion) to US$1.4 billion.

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

The all-cash offer to shareholders of the proposed new company is 126 rupees per share, Radiant said. This offer values the whole of Fortis at 165 rupees per share, or 85.58 billion rupees (S$1.7 billion), including the SRL stake.

The offer is contingent on, among other things, Radiant being able to buy 26 per cent or more shares of the proposed new company.

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 per cent stake in Radiant with its US$200 million investment last year, Radiant said.

REUTERS

A version of this article appeared in the print edition of The Straits Times on April 21, 2018, with the headline 'KKR-backed Radiant Life Care enters race to acquire Fortis'. Print Edition | Subscribe