The deal will mark Blackstone’s first healthcare investment in India with TPG staying on as a minority shareholder, holding about 30%. Notably, the deal was signed between the two private equity giants even as the sale itself is being challenged in court by Max Healthcare Institute, which has accused TPG of breaching the terms of an exclusivity agreement between them on a transaction.
A TPG spokesperson declined to comment. Blackstone didn’t respond to queries. On May 3, the Bombay High Court appointed retired justice SJ Kathawalla as the sole arbitrator in the dispute between Max Healthcare and Care Hospitals and TPG-owned entities to decide upon all disputes between the parties.
The arbitrator will have to decide on the interim relief within the next 15 days. ET reported on May 4 that Darius Khambata, appearing for TPG-backed Touch Healthcare-one of the respondents in the case – argued that Care-TPG had already entered into a share purchase agreement (SPA) with a third party that’s a reputed global investor.
“Blackstone believes the outcome of the arbitration is unlikely to have a major bearing on the transaction and that is the primary reason why it has agreed to sign the deal,” said a person close to the development.
The transaction is said to have taken place at a lower valuation from what was being sought initially. Blackstone had emerged as the highest bidder in the initial sale process but talks had broken down over valuation mismatches, following which TPG entered into talks with Max. As per the terms of the agreement, ET reported on April 21, citing sources, that Max had given a non-binding offer to TPG within the stipulated six-week window for a buyout. But the Max offer was a structured agreement with an option on the Bangladesh assets after two years–it wanted to run the operations in that country for two years before making an offer to buy them.
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