Manipal offers USD 314 million to bail out Fortis

Manipal and its consortium partner TPG Capital are offering 160 rupees per share for the acquisition, according to a letter from Manipal posted by Fortis on the stock exchange feed. Manipal, which plans to merge its business with that of its rival, said its offer values Fortis at 83.58 billion rupees ($1.25 billion). In its previous offer, Manipal had offered to buy Fortis’ hospitals for 63.22 billion rupees. 

Fortis has been the target of five companies and investment groups, who are vying for control of its 30-odd hospitals across India. The country’s private healthcare market is expected to enjoy strong growth with the introduction of a new government insurance plan that is expected to make private healthcare more affordable for millions of poor families. Fortis has set up an advisory committee to evaluate the binding offers. Its board plans to meet on May 10 to consider the recommendations. 

Manipal has proposed to provide Rs 21 bn through preferential allotment of equity shares by Fortis, which needs funding to repay its existing loans and other commitments, the letter said. 

Earlier this month, Malaysia’s IHH Healthcare Bhd lifted its offer to Rs 175 a share, while Indian businessmen Sunil Munjal and Anand Burman increased their combined offer to invest in the company to Rs 18 bn. Both these bidders are vying for partial equity stakes in the company. 

Radiant Life Care, backed by private equity firm KKR & Co, has also made a binding offer to acquire Fortis’ Mumbai-based Mulund Hospital for an enterprise value of Rs 12 bn and a separate non-binding offer involving spin-off of diagnostic services arm SRL. China’s Fosun International, the only one to have not revised its initial offer, had made a non-binding offer last month to invest up to $350 mn subject to due diligence for a stake that would be less than 25 per cent.