Manipal-TPG sweetens bid for Fortis, raises value of hospital biz to Rs 6,322 crore

The Manipal-TPG consortium on late Tuesday sweetened its bid for Fortis Healthcare by valuing the latter’s hospital business at Rs 6,322 crore, an increase of Rs 261 crore as compared to its earlier offer.

The consortium’s revised bid offered to invest Rs 750 crore upfront into the hospital business to address immediate liquidity concerns.

To ensure certainty of the transaction, if approved by the Fortis Board, Manipal-TPG have submitted a letter of intent for Rs 750 crore from ICICI Bank.

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Manipal-TPG has proposed to demerge the hospital business of Fortis and merge it with Manipal Hospitals.

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The revised offer, also tweaks the transaction pertaining to SRL, the diagnostics subsidiary of Fortis.

In its earlier offer submitted on April 10, Manipal-TPG was to acquire 20 percent stake in SRL from private equity investors for Rs 720 crore and subsequently conduct a rights issue.

The latest offer proposes purchase of stake not only from PE investors, but acquisition of Fortis shares in SRL not amounting to more than 5 percent of the SRL’s paid up share capital.

The proceeds from stake monetisation will be used for repayment of loans.

This is the third time that Manipal-TPG has revised the offer, which now values Fortis stock at Rs 161.6 a share against the previous valuation of Rs 155.

The latest proposal comes amid revised offers from other suitors.

Fortis has received five bids overall — from Manipal-TPG (which valued it at Rs 161.6 per share), Munjal-Burmans (Rs 160 per share), IHH Healthcare (Rs 160 per share), Fosun (Rs 156 per share) and Radiant Life Care (Rs 165 per share).

With the exception of Fosun – the rest of the bids are binding.

The advisory committee headed by Deepak Kapoor will be meeting on Wednesday to evaluate the binding bids and identify the best deal. The Fortis Board is expected to meet on Thursday to take a final decision on the recommendations.

Share of Fortis gained 0.03 percent and were trading at Rs 151.60 on BSE at 12.41 pm, while the benchmark Sensex declined 0.22 percent to 34,540.95 points.

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