Manipal Hospital Enterprises Pvt. Ltd and its private equity investor TPG Capital have revised their offer for Fortis Healthcare Ltd for a third time, upping the ante in the five-way takeover battle for India's second-largest hospital chain.
TPG-Manipal have now proposed to invest Rs 2,100 crore ($313 million) via a preferential allotment of shares at Rs 160 apiece, Fortis said in a stock-exchange filing on Sunday.
The cash infusion is to help the company repay loans, meet working capital expenditure and fund the acquisition of Singapore-listed Religare Health Trust (RHT), Fortis said.
The new offer values Fortis Healthcare at Rs 8,358 crore ($1.25 billion) and is valid till 15 May, according to Manipal's letter to the Fortis board. Manipal also said that its term sheet previously drawn with the private equity investors in SRL Ltd has expired and that the new offer values the diagnostics unit of Fortis at Rs 3,600 crore.
Shares of Fortis on Monday closed at Rs 155.75 apiece, falling 1.2% on the BSE where the benchmark Sensex gained 0.8%.
Meanwhile, Reuters cited Manipal CEO Ranjan Pai as saying that the new offer for a cash infusion was a "more risky" approach that the company had to take to fight rival bidders.
Pai said the new offer was riskier because of the uncertainty around the outcome of the probe by the Serious Fraud Investigation Office into allegations that Fortis founders Malvinder Singh and Shivinder Singh had siphoned funds off the company. The founder brothers deny wrongdoing and left the company in February.
TPG-Manipal was the first suitor for Fortis and had signed a pact to acquire the hospital business of Fortis and SRL in late March. However, that offer raised shareholder concerns regarding lower valuation.
Subsequently four more suitors emerged for Fortis--Malaysia's IHH Healthcare, China's Fosun, KKR-backed Radiant Life Care and a consortium of Sunil Munjal-led Hero Enterprise Investment Office and Dabur's Burman Family Office.
TPG-Manipal first raised their offer, by almost 21% to Rs 6,061 crore, in early April and then revised it to Rs 6,322 crore in late April.
All other suitors except Fosun have also revised their offers. Just last week, IHH Healthcare and the Munjal-Burman consortium raised their offers for Fortis.
Fortis has set up an advisory panel to consider the binding proposals and submit its recommendations to the board.
The board will meet on 10 May to consider the recommendations of an advisory committee. The committee is chaired by Deepak Kapoor, the former chairman and CEO of consultancy firm Price Waterhouse Coopers, India.
Last week, Fortis had hired Arpwood Capital Advisors to advise the board on the offers received. Fortis had previously hired law firm Cyril Amarchand Mangaldas and Standard Chartered Bank as advisers.