Fortis battle: Manipal-TPG raises bid further; a look at all four binding offers so far

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Updated: May 7, 2018 11:03:57 AM

Race for Fortis: The race for Fortis took got another twist after Manipal-TPG raised its offer on Sunday, raising the value of the healthcare company to Rs 8,358 crore.

Fortis has received offers from four heavyweights– KKR-backed Radiant Life Care, Malaysian major IHH Healthcare, Manipal/TPG consortium and Munjal and Burman family offices.

Race for Fortis: The race for Fortis took got another twist after Manipal-TPG raised its offer on Sunday, raising the value of the healthcare company to Rs 8,358 crore. The development comes even as Fortis’ board will meet on May 10 to take a decision on the binding bids for the company as recommended by the expert advisory committee. In the major slugfest, four bidders have time and again sweetened their offer in order to outbid the other. Currently, the company has four binding offers  from four heavyweights– KKR-backed Radiant Life Care, Malaysian major IHH Healthcare, Manipal/TPG consortium and Munjal and Burman family offices. We take a closer look.

Manipal-TPG

According to a statement filed on the exchanges yesterday, Manipal Health Enterprises has proposed a value of Rs 8,358 crore to be attributed to FHL and a value of Rs 6,070 crore to be attributed to MHEPL for the purposes of the merger. The revised offer translates into Rs 160 per equity share. Further, the company also offered to subscribe to equity shares of FHL by way of preferential allotment for Rs 2,100 crore at a price per equity share of Rs 160. According to the statement, the move is aimed at helping FHL deal with short term liquidity concerns, repayment of existing loans and payment for the acquisition of the relevant Indian entities from Religare Health Trust (RHT).

IHH Healthcare

Just ahead of the deadline for submitting binding offers on May 1, Malaysia’s IHH had made a revised enhanced proposal to invest directly into the company. “It is hereby informed that the Company today i.e. May 1, 2018, has received an Enhanced Revised Proposal, as attached herewith, from IHH to invest directly into the Company at a per share price of INR 175,” Fortis Healthcare said in a statement. This compares with Rs 160 per share earlier. According to the details, Malaysia’s IHH had submitted a binding offer to infuse Rs 650 crore in the Indian firm as part of an overall proposal to invest Rs 4,000 crore. IHH had initially made a “non-binding expression of interest” and was willing to pay up to Rs 160 per share. In IHHs assessment, Fortis would need an equity infusion of around Rs 400 crore for working capital and buying the asset portfolio of RHT Health Trust.

Munjal-Burmans

Munjal-Burmans too sweetened their bid by offering to invest Rs 1,800 crore directly into Fortis without seeking due diligence. While they propose to invest up to Rs 1,800 crore, Rs 1,050 crore would be paid upfront. Their bid compares to be Rs 300 crore higher than an earlier proposal. Further, the duo propose that the preferential allotment of warrants for Rs 1,000 “We believe that there are several compelling reasons for our investment proposal to be put forward to the shareholders for their urgent consideration as it is in the best interest of all concerned,” Munjal-Burmans consortium said.

KKR- backed Radiant Life Care

PE giant KKR backed Radiant Life Care has submitted a binding offer to pick up Fortis Healthcare Mulund hospital for an enterprise value of Rs 1,200 crore, according to PTI. According to Radiant, this will help Fortis to get immediate cash. Apart from picking up the Mulund Hospital, Radiant seeks to spin off of the diagnostic business. According to the currently available details, Radiant proposes a per share value of Rs 170 per share for FHL if the valuation achieved for 100% equity value of SRL is Rs 4,000 crore. If this value is Rs 4,500 crore, it proposes a per share value of approximately Rs 175.  Further, Radiant has also proposed a demerger of the hospitals business from Fortis Healthcare into a new company, where it would launch an all-cash open offer to shareholders for this new entity at a price of Rs 126 per share.

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