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Manipal sweetens its Proposal to acquire Fortis, also to inject Cash

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Published on : May 07, 2018

Private healthcare services in an emerging market such as India is headed for exciting times, with some attractive acquisition bids being made in recent months. An Indian chain of specialist hospital Fortis Healthcare Limited has been the cynosure of suitors of all hues. As many as five companies and investment groups have eying stake in its hospitals and have made binding as well as non-binding offers for the same. At the forefront is a privately-held multispecialty chain Manipal Hospitals based in Bengaluru, which seeks to acquire its 30-odd hospitals and has sweetened its proposal for the acquisition. Under the bid, Manipal, together with its consortium partner TPG Capital, a U.S.-based investment company, has recently decided to offer 160 rupees per share, thus valuing Fortis at 83.58 billion rupees or US$1.25 Bn.; in a previous bid, Fortis was valued at 63.22 billion rupees.

Manipal Hospital Group to infuse 21 Bn Rupees to help Fortis meet its immediate Cash Requirements

Fortis has been struggling with funds to pay its existing loans and other requirements. The cash-strapped company struggling with loans will also get an infusion of 21 billion rupees (or US$314 Mn) by Manipal to help meet imminent cash needs.

The acquisition is not final yet and will be reviewed by its advisory committee, who is scheduled to meet on May 10 this year.

Several Earlier Binding and Non-binding Offers to acquire stake in Fortis fell through

Earlier offers include the one made by IHH Healthcare Berhad, Malaysia-based private healthcare group for acquiring a private equity stake in Fortis, who had lifted its offer. Another one was made two of Indian businessmen, who had agreed to invest 18 billion rupees. A prominent one, a binding offer, was made by Radiant Life Care Pvt. Ltd. backed by a global investment firm KKR & Co. L.P., who agreed to acquire Fortis’ Mulund Hospital for 12 billion rupees.

Compared to other rival investors, Manipal-led consortium was given an extension of deadline from May 1 and May 6. Clearly, this has not amused many investors, who plan to oppose the acquisition bid.