Under the lens

Why is Fortis scared of due diligence?

Proxy advisory firms wonder why a due-diligence exercise cannot be carried out: The lack of it would only have made sense if Fortis was in “a situation akin to a patient who is in urgent need of oxygen”.
Nasir Kachroo/NurPhoto via Getty Images
The one factor that worked in favour of the Munjal- Burman consortium’s bid for Fortis Healthcare, over financially and operationally superior offers from other bidders such as IHH and Manipal-TPG, seems to be due diligence.In its revised bid, IHH had asked for just seven days for carrying out due diligence. But, the Fortis board found even that to despite these concerns, they will need to work much harder than they may have expected. “One, to clean up the company, including its board and run the business. Two, to build credibility with the investors – not being an obvious choice, the defects in the sale process stigmatises them far more than they may have expected.”(With inputs from Anuj Gupta)
The one factor that worked in favour of the Munjal- Burman consortium’s bid for Fortis Healthcare, over financially and operationally superior offers from other bidders such as IHH and Manipal-TPG, seems to be due diligence.In its revised bid, IHH had asked for just seven days for carrying out due diligence. But, the Fortis board found even that to despite these concerns, they will need to work much harder than they may have expected. “One, to clean up the company, including its board and run the business. Two, to build credibility with the investors – not being an obvious choice, the defects in the sale process stigmatises them far more than they may have expected.”(With inputs from Anuj Gupta)

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