India’s privately-held Manipal Hospitals sweetened its bid for rival Fortis Healthcare Ltd on Sunday, offering to inject Rs 21 billion ($314 million) to help the ailing hospital operator meet its immediate cash needs.
Manipal and its consortium partner TPG Capital are offering Rs 160 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 Rs 83.58 billion ($1.25 billion). In its previous offer, Manipal had offered to buy Fortis’ hospitals for Rs 63.22 billion.
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 billion 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 billion. 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 billion 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 million subject to due diligence for a stake that would be less than 25 per cent.
Some investors are unhappy that the Manipal-led consortium has been given more time than rivals to match or top the rival bids and say they plan to vote against the group if it is selected as the winning bidder.
The group, which initially reached an agreement with Fortis in March, before rival suitors made their interest public, had been given until May 6 to submit a bid, while the other four suitors were bound by a May 1 deadline.
