Day after Tpg-manipal sweetens its bid for Fortis, IHH plans fresh offer
MUMBAI: A day after the TPGManipal Group sweetened its bid for Fortis Healthcare Ltd’s hospital assets, IHH Healthcare Bhd is preparing to formally approach the hospital operator with an offer, Bloomberg reported, citing people it didn’t identify.
Kuala Lumpur-based IHH, which is contemplating a cash offer for Fortis, plans to send a letter to the hospital operator’s board within the next couple of weeks with its bid details, the news agency reported.
IHH’S offer would compete with the Manipal Group’s revised bid, which was raised on Tuesday after some large shareholders of Fortis said the earlier offer had undervalued the hospital assets.
Manipal’s revised offer pegged Fortis hospitals’ equity valuation at ₹6,061 crore (₹116 per share)—an upward revision of about 21% from the previous offer, Manipal Group chairman Ranjan Pai said in an interview. The revised offer values Fortis Healthcare at ₹155 per share.
Fortis Healthcare will separate its hospital assets and merge it with Manipal Hospitals and create a combined hospital business that will be a publicly traded company. This will be followed by a rights issue of ₹4,000 crore to support the proposed acquisition of hospital assets owned by RHT Health Trust. This will provide an opportunity to Fortis Healthcare shareholders to participate on an equal basis with Manipal Group and TPG Capital to fund the capital needs of the combined hospital business.
Tpg-manipal had announced their first offer for Fortis Healthcare on March 27.
“We waited for three-four days to get all the feedback and then the following week started getting on phone calls and met a few people face to face. We spoke to most of the major shareholders. The investors told us that they like the logic of merger of Manipal and Fortis, they like Manipal as a promoter and that they like TPG as an investor,” said Pai.
According to Pai, the major concern for Fortis shareholders revolved around the issues of the structure of the deal and the pricing.