In a step which could attract shareholder, the board of Fortis Healthcare rejected a proposal by Manipal Health Enterprises to allow all competing bidders three weeks due diligence on the troubled hospital chain, people are directly aware of the matter it said.
The original bidder Manipal, in a letter to the board on Thursday, stated that it was willing to waive an exclusivity to facilitate due diligence if an option to match the best offer was provided.
They added to it that India’s second-largest hospital network didn’t have much time to deal with non-binding offers given its precarious financial situation, sources added. Manipal, in the letter, also said it was ready to extend immediate loans to ensure smooth running of the hospital network.
Two large shareholders, East Bridge Capital and Jupiter India Fund, which have together amassed over 12% stake, sent notices on Wednesday to call for an EGM to remove four directors on the Fortis board. The company’s board decided to form a committee to evaluate only binding offers and make recommendations to be considered by it on April 26.
IIAS claimed in a report that the board needs to rework how it approaches the various bidders and for it to open up the bidding process. This is not without its risks, but Fortis’ board needs to ensure that shareholders realise the full potential of their investments.
The Fortis board needs to put together a vendor due diligence document for all the bidders, which would flag all relevant issues.