Care Hospitals buyout lands up in Bombay High Court; Max Healthcare sues TPG: Report

“The takeover battle for Care Hospitals has landed up in the Bombay High Court with Max Healthcare Institute filing a suit against private equity firm TPG after the Care owner spurned Max’s bid in favour of an offer by Blackstone, the world’s largest PE fund, that was about 15-20 per cent higher,” ET reported quoting people with knowledge of the matter.

As per the report, hearings are set to begin on May 3.

“Max Healthcare is citing a breach of their term sheet agreement over a “specific performance” clause. Under this, TPG should specify why it is not honouring an agreement, according to one of the persons cited above. Their legal move has been precipitated by Blackstone improving its offer after the sale process for Care was revived earlier this year once valuation expectations were lowered from the original ask of ₹7,000-8,000 crore,” said the ET report.

The ET report further said that Max and TPG had entered into an exclusive deal for bilateral negotiations in which Max had given a non-binding offer to TPG within the stipulated six-week window for a buyout.

Max was aiming to increase its pan-India presence as Care Hospitals has a strong South Indian footprint.

Mint in the last November reported that private equity giants KKR and Temasek, as well as Max Healthcare Institute Ltd, were competing to acquire Care Hospitals in a potential deal valued at more than $1 billion (about ₹8,200 crore).

The TPG-backed Quality Care India Ltd, which runs the hospital chain, had also shortlisted two other private equity giants Blackstone and CVC Capital Partners.