Manipal Health again sweetens offer for Fortis Healthcare

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 by way of 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). "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....," MHEPL said in a letter to the FHL board.

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% 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. On Tuesday, 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.

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 $350 million (over Rs 2,295 crore). FHL stock was trading 0.49% down at Rs 150.80 in the afternoon on the BSE.