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Manipal-TPG revises offer for Fortis yet again, Radiant submits binding bid

25 April, 2018

The five-way battle to takeover Fortis Healthcare Ltd intensified with TPG-backed Manipal Hospital Enterprises Pvt. Ltd revising its offer yet again, while KKR-backed Radiant Life Care Pvt. Ltd submitted a binding proposal to acquire India’s second-largest hospital chain.

The development comes just a day before the deadline to submit proposals before the Fortis panel ends on Thursday.

Manipal-TPG has revised its bid to offer Rs 1,319 crore over and above the equity valuation of Rs 5,003 crore for Fortis’ hospital business.

Manipal-TPG, which is also in talks to pick up the stakes held by private equity investors in SRL Ltd, said it would offer the same price if Fortis agrees to sell a 5% stake in its diagnostics business. “This is to ensure that Fortis is able to monetise a portion of its stake in SRL towards repayment of its overdue loans, while retaining a majority stake in SRL,” the proposal said.

Besides, Manipal said it was also willing to provide debt financing of up to Rs 750 crore to meet the immediate liquidity requirements of the company once the Fortis board, its shareholders and the Competition Commission of India approved the transaction.

Manipal-TPG had said that it would provide a debt financing option, but had not quoted an amount earlier. It has already received an in-principle nod for the debt financing from ICICI Bank, it added.

Late on Tuesday, Radiant, too, raised the pitch with a binding proposal to buy Fortis Mulund for Rs 1,200 crore without any due diligence. The move, the company said, would provide immediate liquidity of Rs 680 crore to Fortis.

On Tuesday, Malaysia’s IHH Healthcare Berhad had also placed a revised binding offer, agreeing to immediately infuse Rs 650 crore by way of a preferential allotment.

While four of the five suitors, including TPG-Manipal, Munjal-Burman, IHH and Radiant, have placed binding bids, Fosun International is yet to file one. The Fortis panel set up last week will consider only binding proposals and submit its recommendations on Thursday.

Takeover battle
Last month, Fortis had announced that its board had approved the sale of its hospital business to private equity firm TPG Capital-backed Manipal Health. The proposed merger would create India’s largest healthcare services provider by revenue, outranking Apollo Hospitals Enterprise Ltd.

Subsequently, two weeks ago, Manipal had sweetened the deal amid growing disappointment of Fortis shareholders and a possible counter bid from Malaysia’s IHH Healthcare. The revised offer valued the hospital business at Rs 6,061 crore, or Rs 116 per share, up almost 21% from the initial offer.

Manipal-TPG’s revised offer was followed by a surprise joint proposal by Hero Enterprise Investment Office and the Burman Family Office. IHH Healthcare also entered the fray with an offer of Rs 160 per share, but soon after it said that Fortis had rebuffed its offer. Subsequently, the Malaysian company filed a revised binding bid.

Fosun, too, joined the race to buy Fortis following the revised offer by Hero-Burman consortium. Radiant was the last one to open up another frontier in the takeover battle.

The sale of Fortis’s hospital business faced several hurdles, given the promoters’ brush with several legal and regulatory issues. Brothers Malvinder and Shivinder Singh, who lost control of the healthcare firm after their stakes plunged to low-single digits, had subsequently resigned from the board in February.

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Manipal-TPG revises offer for Fortis yet again, Radiant submits binding bid

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