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Manipal-TPG, one of the front-runners for a stake in Fortis Healthcare Ltd (FHL), has revised its bid for the company further on late Tuesday, before the Fortis board of directors meet on Thursday to take a call on the bids based on the evaluation by an expert committee.
In its revised bid, Manipal Health Enterprises Private Ltd (MHEPL) has proposed to offer a premium of ₹1,319 crore to the FHL shareholders over and above FHL Hospital Business’s equity valuation of ₹5,003 crore.
Earlier, MHEPL had offered a premium of ₹1,058 crore. “This would result in an equity value of ₹6,332 crore being attributed to the FHL Hospital Business (as opposed to ₹6,061 crore earlier) for the purposes of computing the share entitlement ratio for the purpose of the demerger, and therefore, this would result in a more favourable share exchange ratio for the FHL shareholders,” MHEPL said in its revised offer submitted to the FHL board.
The revised bid also proposes that Manipal Education and medical group will arrange financial assistance of up to ₹750 crore in accordance with applicable laws, either by way of debt financing or by way of guarantees/comfort letters to lenders of FHL subject to certain conditions.
The implementation agreement, however, shall provide that the cash received by FHL from the sale of the ‘Fortis’ brand shall be utilised to reduce the actual indebtedness, the proposal said.
In order to increase deal certainty, MHEPL has proposed mark ups to certain clauses of the implementation agreement, which have been sent to the FHL board for review.
FHL, in a submission to the BSE and the National Stock Exchange on Wednesday, pointed out that certain facts had been omitted by Manipal in its revised offer.
While the Manipal revised offer states that Manipal and TPG had given Fortis a one-time waiver from the exclusivity provisions under the implementation agreement signed on March 27, 2018, by permitting Fortis with a limited ability to undertake a process by permitting due diligence, it left out certain things, FHL stated.
“The aforementioned statement omits certain key facts, such as conditions of the waiver wherein Manipal and TPG sought to impose additional onerous conditions on the company over and above those contained in the implementation agreement that would limit the ability of Fortis to run a competitive bid process if such conditions were to be accepted,” the submission pointed out asking the stock exchanges to put it on record.
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