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Manipal Health Again Sweetens Offer for Fortis Healthcare

The move comes ahead of Fortis board's meeting to consider the recommendations of an expert advisory panel formed to finalise the evaluation process of all binding offers.


Updated:April 25, 2018, 10:54 PM IST
Manipal Health Again Sweetens Offer for Fortis Healthcare
Fortis Healthcare had received binding offers from four entities - KKR-backed Radiant Life Care, IHH Healthcare, Manipal/TPG consortium, and Munjal and Burman family offices. (Image for representation. File photo)

New Delhi: Manipal Health Enterprises has revised its offer for Fortis Healthcare again, raising the value to Rs 6,322 crore, according to a regulatory filing.

The move comes ahead of Fortis board's meeting to consider the recommendations of an expert advisory panel formed to finalise the evaluation process of all binding offers.

The new offer from Manipal Health Enterprises Pvt Ltd (MHEPL) also proposes that Manipal Education and Medical Group India Pvt Ltd will arrange financial assistance of up to Rs 750 crore either by way of debt financing or through guarantees, comfort letters to lenders of FHL.

This is the second time Manipal/TPG-led consortium has revised its offer for Fortis Healthcare Ltd (FHL).

FHL meanwhile said in a filing that acceptance of one-time waiver from the exclusivity provisions given by Manipal and TPG to it on April 19 would have limited its ability to run a competitive bid process.

Manipal's revised offer states that it had given Fortis a one-time waiver from the exclusivity provisions under the Implementation Agreement signed with them on March 27, 2018 by permitting Fortis with a limited ability to undertake a process by permitting due diligence, Fortis said in a filing.

"The aforementioned statement omits certain key facts, such as conditions of the waiver wherein Manipal and TPG sought to impose additional onerous conditions on the company over and above those contained in the Implementation Agreement...," it added.

These conditions would limit the ability of Fortis to run a competitive bid process if such conditions were to be accepted, FHL said.

"Since FHL did not accept the terms and conditions of the of the one-time waiver letter within the period specified therein, the proposals set out under the letter stand automatically terminated," the letter by Manipal Health Enterprises to Fortis board has said.

It added: "MHEPL proposes to offer a premium of Rs 1,319 crore to the FHL shareholders over and above the FHL Hospital's Business' equity valuation of Rs 5,003 crore, as determined by the independent valuer....".

This would result in an equity value of Rs 6,322 crore being attributed to FHL Hospital Business for purposes of computing the share entitlement ratio for the purposes of demerger, it added.

The earlier revised offer of April 10 valued Fortis hospital business at Rs 6,061 crore.

The letter also mentions that the new revised offer provides a road map for the exit of PE investors from SRL.

As per the offer, Manipal Health would purchase 5 per cent of SRL's paid up share capital on a fully diluted basis from FHL for the same price per share as being paid for the PE SRL stake.

"This is to ensure that FHL 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 letter said.

On April 10, the Manipal/TPG consortium had raised their offer for Fortis to Rs 155 per share by valuing the hospital business higher at Rs 6,061 crore from Rs 5,003 crore in its initial offer on March 27.

Yesterday KKR-backed Radiant Life Care also made a revised bid for Fortis Healthcare Ltd (FHL) with a binding offer to acquire its Mulund hospital for an enterprise value of Rs 1,200 crore.

Already Malaysian major IHH Healthcare has revised its proposal and made a binding offer to immediately infuse Rs 650 crore in the Indian firm as part of an overall proposal to invest Rs 4,000 crore.

Besides, FHL has received a binding offer from Hero Enterprise Investment Office and Burman Family Office. Group entities of Hero Enterprise Investment Office led by Sunil Kant Munjal and the Burman family of the Dabur Group currently hold around 3 per cent stake in the healthcare chain.

FHL had also received an unsolicited non-binding expression of interest from Fosun Health Holdings, an arm of Fosun International, with a proposal of primary infusion at a price up to Rs 156 per share up to a total investment of USD 350 million (over Rs 2,295 crore).

FHL stock closed at Rs 152.65 per share on BSE, up 0.73 per cent from its previous close.

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| Edited by: Huma Tabassum
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