Manipal-TPG sweetens bid for Fortis to Rs 180

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Manipal-TPG sweetens bid for Fortis to Rs 180

MHL said that the new offer shall remain valid for acceptance by the FHL board till May 29. If so, Fortis' agreement with Manipal-TPG may possibly stand: there is an Implementation Agreement that has been signed by the Fortis board.

To remind you, FHL had received four binding bids, from Malaysia's IHH Healthcare Berhad, Manipal-TPG and KKR-backed Radiant Life Care apart from the winning bid. They opined that their bid offers the highest price and most comprehensive solution, addressing the short term liquidity requirements and long term strategic objectives of the company.

Manipal/TPG have claimed that their offer is significantly better than any other offer received by the board including Munjal/Burman. Hero-Burman had offered to infuse ₹800 crore via a preferential allotment of equity share valued at ₹167 a scrip. According to the daily, both advisers had opined that seeking time for diligence was not a big enough risk - after all, IHH had already done a detailed analysis of the company a year ago before the legal tussle with Daiichi Sankyo threw a spanner in the works. If shareholders approve the recommendation, it effectively ends the bidding war over Fortis, which has intensified in the past month as suitors enhanced their respective offers in order to outbid others.

The issues include FHL's payment obligations for the acquisition of the relevant Indian entities from RHT and the exit required to be provided by FHL to the private equity investors in SRL, it added.

Comments from the Munjal-Burmans combine could not be immediately obtained.

Hours after Business Today reported how fissures in the Fortis Healthcare Ltd boardroom have widened further after the recent selection of top bidder - Munjal-Burman combine - didn't go down well with FHL's independent directors, the bidding war in acquiring cash-strapped Fortis seems to be on with Manipal-TPG combine revising its offer to Rs 180 per share from its earlier offer of Rs 160 a piece, which is 8 per cent higher than the current victor Munjal-Burman combine, on Monday. The board itself was also not unanimous, but had a majority in their decision.

The advisors had found the Munjal-Burman bid the best in terms of deal certainty, with low structural complexity and no due diligence. There is a likelihood that shareholders will not support the decision however, as we view the chosen offer as less compelling compared with IHH's and Manipal's. They have also sought three board seats in Fortis. National Westminster Bank Plc as trustee of Jupiter India Fund and East Bridge Capital Master Fund, which together hold a 12.04 per cent stake in FHL, have accused these directors of failing to maintain corporate governance and fairly represent interests of all shareholders.

Fortis late on Thursday said it planned to accept an offer from Hero Enterprise Investment Office (controlled by the Munjals) and the Burman Family Office that would invest Rs1,800 crore (266.5 million), valuing Fortis at Rs9,000 crore, subject to shareholder approval. In fact, the investors plan to call for fresh bids for the hospital chain if the board members are replaced.

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