China's Fosun enters race to buy Fortis Healthcare

Fosun International — the Chinese conglomerate known be aggressive on international M&A circuit — late Tuesday joined the bidding race to take control of India's second largest healthcare provider Fortis Healthcare.

Fortis Healthcare in late exchange filing on Tuesday said it has received an unsolicited non-binding expression of interest from Fosun with an offer to inject Rs 100 crore within the next 45 days that includes an option of immediately subscribing to convertible debt instruments of the company.

The Rs 100 crore funds will be on the condition that Fortis agrees to a one-month period of exclusivity for Fosun to undertake due diligence and negotiate a proposal to acquire stake in the company.

If Fortis agrees to the exclusivity period, Fosun will consider a primary infusion of up to USD 350 million (approximately Rs 2,300 crore) at a price of Rs 156 per share that shall not enable Fosun to hold 25 percent or more securities of Fortis, the filing said.

That’s inclusive of the Rs 100 crore that the company proposes to inject earlier.

Fosun calling itself as a long-term investor said it's aware of the Fortis near-term cash requirements, strategic plans for consolidation of its real estate assets, and various alternative proposals put forth in the Board's consideration.

"We believe our proposal outlined in the letter will best support the company's immediate needs, while supporting the Company and its existing investors at a fair valuation to optimise long term return," Fosun added.

Fosun added that it has sufficient funds for the transaction without requiring any external financing.

Fortis board will be meeting tomorrow to take a decision on the bids it has received.

The Hong Kong-listed Fosun along with three other interested parties including TPG-Manipal consortium, Malaysia’s IHH healthcare and Munjal-Burman family are in fray to take control of the cash-strapped hospital chain Fortis Healthcare.

Founded in 1992 - Fosun has total assets over USD 75 billion.

The company last year bought Hyderabad-based injectable drug maker Gland Pharma for USD 1.09 billion at the height of India-China stand-off at Doklam.

Fosun other big M&A transactions include Fosun Pharma, Sinopharm, United Family Hospitals, Luz Saude, Fortress Investment, Kite Pharma, Intuitive Surgical, Henlius and Alma Lasers.