Malaysia's IHH tops Manipal Hospital's bid for India's Fortis

Manipal Group chairman Ranjan Pai says a major concern for Fortis shareholders revolved around issues of structure of the deal and pricing which have now been addressed

Manipal Group chairman Ranjan Pai says a major concern for Fortis shareholders revolved around issues of structure of the deal and pricing which have now been addressed

Fortis Healthcare has already received two offers while the third one, from IHH, is expected.

"As on date, based on publicly-available information and our preliminary analysis, we believe a price of up to Rs 160 per Fortis share to be appropriate, subject to satisfactory completion of a due diligence", he said. IHH is planning a cash offer for Fortis shares, people with knowledge of the matter said Wednesday. Brothers Malvinder Singh and Shivinder Singh have resigned from the company and have lost control of their shareholding due to mounting debt.

Fortis is under investigations by India's Serious Fraud Investigations Office and the Securities and Exchange Board of India regarding financial fraud.

Fortis shares spiked following the report, although it wasn't immediately clear if the new bid would appease minority shareholders. On Tuesday, Manipal revised the term, offering Rs 155 a share to Fortis.

Subsequently, amid reports of growing disappointment of Fortis shareholders and a possible counter bid from IHH, Manipal had sweetened the offer. Manipal Hospital's equity valuation remained at Rs 6,070 crore.

But even without it, an under-resourced Indian public health system has helped Fortis - with around 30 hospitals across India - and rival private-healthcare companies such as Manipal and Apollo Hospital Enterprise Ltd grow rapidly in recent years, tapping into demand for better healthcare. It has asked the Fortis board for some time to update its due diligence before making a formal bid for the company in which group entities of Hero Enterprise Investment Office led by Sunil Kant Munjal and the Burman family of the Dabur Group hold around 3 per cent stake.

The Munjal-Burman consortium had said that their offer is "simple and does not envisage any changes to the current structure, operations, and assets" of Fortis. The deal with Manipal is likely to take up to 12 months to complete.

Fortis Healthcare would be in focus today after the company, late yesterday night, received an offer from offices of Munjals and Burmans.

IHH Healthcare Berhad, which is majority owned by Malaysian sovereign wealth.

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