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Fortis in focus, all potential investors offer almost identical prices

IHH is likely to offer Rs160/share to buy the controlling stake in Fortis Healthcare, while Manipal is paying Rs155 and Munjals+Burmans are offering Rs156 per share. The average price of all the offers comes to Rs157.
Fortis Healthcare would be in focus today after the company, late yesterday night, received an offer from offices of Munjals and Burmans. Media reports also suggest that Kuala Lumpur-based IHH Healthcare has also sent a letter to board of the Fortis Healthcare indicating that it would be willing to offer Rs160 per share to acquire controlling stake in the company.

Manipal, the first one to throw the hat, has revised its offer from Rs140 per share to Rs155 per share. Fortis Healthcare has already received two offers while the third one, from IHH, is expected. The company has not officially announced anything on this front as of now.

The counter has become interesting due to flush of the offers. The average of the three offers is Rs157 and the stock closed 2% below this price.

Who is offering what:
Manipals are offerring Rs 155 per share.IHH Healthcare is offering to pay ~Rs160 per share as per media sources (no announcement from Fortis Healthcare).
Munjals and Burmans have offered higher of Rs 156 per share or price determined by SEBI’s ICDR rules.

Our view

The stock has seen a steep fall due to the corporate governance issues. Its current price and prices offered by all the three investors are well below its 52 week high of Rs231. Yes Bank, the largest shareholder in Fortis Healthare, would not make good profit at any of these prices offered by the three investors. It should be noted that all the three offers look quite identical in prices and it is difficult choose one from all. At least one offer has to pay premium to what others are willing to pay.