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TPG to KKR-Backed Firms Revise Offers for Indian Hospital Chain

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(Bloomberg) -- A company backed by private-equity firm KKR & Co. and another TPG-backed firm revised offers for Fortis Healthcare Ltd. as the latter’s board meets this week to decide on the final bidder for India’s second-largest hospital chain.

Manipal Health Enterprises Pvt., which counts TPG as an investor, increased the value it will assign Fortis’s hospitals business to 63.22 billion rupees ($952 million), in a revised bid to separate that business from Fortis and merge it with its own operations. Radiant Life Care Pvt. has also revised its proposal with a binding bid to buy Fortis Mulund hospital for 12 billion rupees in addition to its earlier offer.

The revised offers are being submitted after Fortis’s board last week said it will only consider binding bids. At least five suitors are in the race for the hospital chain, which has become a prize as growing affluence and a government plan to insure the poor promise to increase access in one of the most under served health-care markets in the world.

The latest offer from Manipal Health, which is controlled by Ranjan Pai and backed by TPG, values Fortis at 160 rupees a share, a person with knowledge of the matter said, asking not to be identified because the information is private. Representatives for Manipal Health and Fortis said they couldn’t immediately comment.

In its offer to Fortis’s board, Manipal Health said it will acquire 5 percent of subsidiary SRL Ltd. from Fortis in addition to buying shares held by private equity firms. Manipal Health said it will also arrange loans or provide guarantees of 7.5 billion rupees for Fortis and its group companies.

Shares of Fortis rose as much as 1.4 percent before trading at 152.20 rupees at 9:27 a.m. in Mumbai. The stock has risen about 19 percent this month, after slumping 23 percent in March.

IHH Healthcare Bhd., Asia’s most-valuable hospital operator, has also revised its offer with a binding bid to invest 6.5 billion rupees through a preferential issue at 160 rupees a share. It also made a non-binding proposal to invest 33.5 billion rupees through another preferential allotment at the same price after due diligence.

Fortis last week formed a panel to evaluate all proposals and make a final recommendation to the board by April 26.

The fight over Fortis kicked off after the shareholding of its founders, Malvinder and Shivinder Singh, slid to less than 1 percent as lenders seized stock they’d put up as collateral. The brothers had resigned from the board in February, a day before Bloomberg News reported they had taken at least 5 billion rupees out without board approval. India’s fraud watchdog and market regulator have since started investigations into the financial irregularities at the company.

©2018 Bloomberg L.P.

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