Fortis Healthcare bid: Manipal's Pai says not ruling out any option including sweetening the offer

Ranjan Pai of Manipal Hospitals said he is not ruling out any option including further sweetening of the offer as the race for Fortis Healthcare intensifies.

“We haven't decided on it (revising the deal), it's little too early,” said Pai, Chief Executive Officer of Manipal Education and Medical Group (MEMG) in telephonic interview to Moneycontrol.

“We are not ruling out anything,” he added.

Pai’s Manipal Hospitals has teamed up with US-based private equity firm TPG Capital to bid for India’s second largest healthcare provider Fortis Healthcare which has been cash strapped and facing investigations from regulatory agencies such as SEBI and SFIO.

Manipal-TPG has sweetened the bid last week valuing Fortis at Rs 155 per share, around 21 percent higher than the consortium’s previous offer.

However, since then Fortis has received four offers each valuing the company higher than the valuation offered by Manipal-TPG combine – with KKR-backed Radiant Life Care valuing it the highest at Rs 165 per share. Munjal-Burmans and IHH Healthcare had valued it at Rs 160 per share, and  Fosun at Rs 156 per share.

Pai said he is “confident” of his bid sailing through despite competition.

“We ran a proper process. We are the last man standing to put in a bid. After we have put in a bid, other people have come. Ours is a binding document,” Pai said.

One reason – that may help tilt the balance in favor of Manipal-TPG consortium is the Fortis Board’s decision to consider only “binding offers.” Apart from Manipal-TPG, Munjal-Burmans team had made a binding offer.

Pai says Munjal-Burmans offer isn’t very comprehensive.

“It's two different bids. It (Munjal-Burmans) doesn't take care of the entire needs of the company but people have to decide what they want at the end of the day,” Pai said.

On a question of whether there is possibility of hostile takeover situation – Pai said anybody can do a hostile takeover.

“There is nothing that we can do about. Good luck to the people who wants to do hostile. We will not be irrational bidders and I think there is certain amount of value that is there and we have given a compelling bid,” Pai added.

The Fortis-Manipal deal if it passes the muster of the Board and shareholders of Fortis  will catapult India’s largest hospital chain with a combined revenue of Rs 5,400 crore.