You are here: Home » Reuters » News
Business Standard

Manipal Hospitals raises bid for Fortis hospital business


By Ismail Shakil

(Reuters) - Ltd raised its offer to buy rival Fortis Ltd's hospital business by about a fifth in an attempt to win over minority shareholders opposed to the deal.

The new offer values Fortis' hospital business about 21 percent higher at 60.61 billion rupees ($933.3 million), or 116 rupees per share, said in a statement late on Tuesday.

first offered to buy Fortis last month in a deal that would combine its 14 with Fortis's portfolio of 34 hospitals, creating a 150 billion rupees company and formidable rival to Apollo Enterprise Ltd.

But the previous bid, which offered shareholders 10.83 shares in the combined company for every 100 Fortis shares held, was panned by investors. It knocked Fortis stock down 14 percent on the day the deal was announced and prompted to make conciliatory comments about keeping minority shareholders' concerns in mind.

The old offer met with disapproval from shareholders including major Indian equity investor, Rakesh Jhunjhunwala, newspaper reported.

said as per the new offer, existing Fortis shareholders will roughly own half of the new company.

Under the previous terms, Ranjan would have owned about 38 percent of the new company, which would be listed on Indian stock exchanges. U.S. buyout firm was expected to hold 20.7 percent.

Manipal's statement on Tuesday did not mention how much of the new company or would own.

"We hope that our revised offer addresses the concerns certain Fortis shareholders had raised and believe this offer is in the interests of all stakeholders, including Fortis' shareholders," said.

Fortis shares were trading down 0.2 percent as of 0437 GMT after having risen as much as 3.6 percent early in the session.

A deal will take some pressure off Fortis, which has been under a cloud as authorities investigate whether its founders, brothers and Shivinder Singh, who are no relation to the CEO, took funds from the company. The brothers have denied the allegations.

For Manipal, a deal would mean greater access to India's burgeoning market, estimated by to grow three-fold to $372 billion by 2022.

Indian companies have grown rapidly in recent years, boosted by increasing demand for better in an under-resourced public health system.

also said on Tuesday it expects to buy a 30.9 percent stake in Indian SRL Ltd, which is partly owned by Fortis. plans to fold SRL into the new company.

($1 = 64.9400 Indian rupees)

(Reporting by in Bengaluru; Additional reporting by Zeba Siddiqui in MUMBAI; Editing by and Muralikumar Anantharaman)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Wed, April 11 2018. 10:54 IST