Mumbai: The race to acquire the hospital business of beleaguered Fortis Healthcare Ltd took an unexpected turn on Monday as TPG-backed Manipal Hospitals submitted a revised bid for the hospital chain, even as the Sunil Munjal-led group was planning to do an open offer to facilitate the smooth exit of small investors.

TPG-Manipal’s offer to infuse Rs2,100 crore is now pegged at Rs180 per share against an earlier proposal of investing the amount at Rs160, Fortis told exchanges.

The new offer has valued Fortis at Rs9,403 crore and Manipal Health Enterprises Pvt. Ltd at Rs6,070 crore.

TPG-Manipal, in the new offer, said they believe it will be difficult for the Fortis board to get approval of 75% shareholders of Fortis for the offer by Munjal-Burmans.

“We also believe that, unlike our offer, the Hero and Burman offer only partially solves the short-term liquidity concerns of FHL (Fortis), including, in particular, FHL’s payment obligation for the acquisition of the relevant entities from RHT and the exit required to be provided by FHL to the private equity investors in SRL," they said.

The TPG-Manipal move comes even as Sunil Munjal and Anand Burman, who won the bid on 11 May to acquire assets of Fortis, were planning an open offer to facilitate small investors’ exit.

“Once we get close to 20%, there is of course also a possibility of evaluating... looking at possibility of adding additional stake in the company through open offer or other means, so that small minority shareholders also get an opportunity to exit, if they may so choose," Sunil Munjal, also the chairman of Hero Enterprise, said in an interview. The proposal of a buy-out by the Delhi-based businessman is due for a vote by shareholders of Fortis on 22 May.

“Once people hear the possibilities and plans, many may want to stay on because the upside of this is quite good," he added.

Munjal and the Burmans are expected to face resistance from some of the disgruntled investors such as East Bridge Capital and Jupiter India Funds, whose move to replace four Fortis directors has drawn support from large shareholders, Mint reported on Monday. Under current rules, investors with 10% or more stake can call for a special meeting of shareholders.

The transaction, if approved by shareholders, will not trigger an open offer because the proposed stake sale is less than the 26% threshold under takeover law.

“We (Dabur Group and Hero Group) have worked with shareholders through our lives. I think it is really about communication. As we meet with the people, we will explain to them and they will see the record of what both our companies have done in terms of highest return and value creation in the country. Any smart investor should be delighted," Munjal said.

“We are looking at what can be done in a 1-3 month period and a three-year plan. We don’t need to make a longer plan than that, because then we will have to have a better understanding than what we have today," he added.

If the Munjal-Burman combine gets shareholders approval on 22 May, it may infuse more equity into the company and will take a decision on outright sale of SRL Diagnostics on the basis of the evaluation of the business plan adopted by the unit.

“SRL is the largest diagnostics chain in the country. It has plenty of potential. So, we can look at it as a possible divestment but that is not from the point of view of cash or liquidity. We will take the decision based on what the business need is. Once we talk to the board and management of SRL and understand what their plan is, and if the plan looks fantastic and or it can be modified to look fantastic, of course it should stay. We are not walking in with the hard point of view on this," Munjal said.

In their binding offer, Munjal and the Burmans have had proposed an independent sale process of SRL Diagnostics, a unit of Fortis Healthcare, and its proceeds be used to buy assets of RHT Holdings, a trust that holds real estate assets of Fortis.