Max Healthcare sues TPG on Care hospitals buyout

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Max Healthcare Institute has moved Bombay High Court against TPG, the owner of Care Hospitals, after the private equity firm favoured Blackstone’s offer over Max’s takeover bid. As per a report in The Economic Times, Blackstone, which is the world’s largest PE fund, has offered a price that is 15-20 per cent higher than Max Healthcare’s offer. Max Healthcare, which offered Rs 3,700 crore for the takeover, has claimed that there is a breach of their term sheet agreement over a “specific performance” clause.

The hearing will be held on May 3. Last week it was reported that Max Healthcare and TPG have signed “deal exclusivity” for bilateral negotiations in April. Abhay Soi-led Max has already given a firm offer to TPG within the stipulated six-week window for a buyout, as per the deal, which also includes an option on the Bangladesh assets.

Max had said it wanted to run the Bangladesh operations for two years before making an offer to buy it. The Care Hospitals’ valuation was pegged at Rs 5,500-6,500 crore, another ET report said.

Blackstone has been the sole contender for Care last December after Temasek-backed Shears backed out to look into the deal of Manipal Hospitals.

Care Hospitals is one of the biggest hospital chains in India with predominantly south India-based business. Had Max bagged the deal, it would have had a presence in south and an almost pan-India presence. Care began as a cardiac hospital from Hyderabad and at present has 17 hospitals in six states with over 2400 beds. It has two hospitals in Bangladesh also with 1,000 beds.

In July 2022, it bought CHL Hospital of Indore, adding 240 beds to the portfolio. Max on the other hand, operates 17 hospitals in India with over 3,400 beds.