Exclusive: Manipal-TPG holds the edge in race to buy Fortis Healthcare

Manipal Hospitals, backed by private equity giant TPG, has the upper hand over four other bidders in the race to acquire Fortis Healthcare, as the deadline for submitting the binding offer nears, people familiar with the matter told CNBC-TV18.

The Manipal Hospital-TPG consortium retains 'right to match' the highest bid for Fortis Healthcare by way of their earlier agreement with the Fortis board.

Sources said that if a higher bid comes on April 24,  a day before before advisory committee meets, the ball will be in Manipal-TPG’s court to either exercise its 'right to match' in five days or let the Fortis board meet go ahead if they do not want to counter the bid.

Manipal-TPG and Fortis Healthcare declined comment to CNBC-TV18’s query.

As per the agreement, Manipal-TPG would get five days to match their offer in case a new binding offer comes in for Fortis by April 25 when the advisory panel will evaluate all binding bids.

Fortis Board had requested Manipal-TPG to waive of their 'right to match', but the group refused to do so, people said, requesting anonymity.

On Monday, Fortis Healthcare said that Hero Enterprise Investment and the Burman family have extended the validity of their improved, joint binding offer to invest Rs 1,500 crore in the company till May 4, PTI reported.

On April 18, Hero-Burman consortium improved their binding offer with a proposal to invest Rs 1,500 crore directly at a valuation of Rs 161.6 per share, from the earlier Rs 1,250 crore. They had stated that their improved offer was valid for five working days.

In the letter to the Fortis board, the two partners said that in the wake of a formation of an advisory committee to evaluate binding offers and recommend to the board for consideration by April 26, they were extending their deadline.

"...We are hereby extending the validity period till May 4, 2018 or as otherwise extended by us in writing and the term of validity period in the improved offer letter should be construed accordingly," the letter said

Sources do not rule out a binding offer from KKR-Radiant which had entered the fray, post the Fortis board meet.

Malaysian giant IHH and Chinese company Fosun International had offered a non-binding bid but may find it hard to give a binding offer without time for due diligence, sources said.

Last week, the Fortis board had appointed an advisory committee to evaluate the offers made to buy out the company. The committee is headed by Deepak Kapoor, Former Chairman and CEO of Price Waterhouse Coopers, India.

CNBC-TV18 was the first to highlight the severe deficiencies in the composition of the Fortis Healthcare board and argued that the board will have to appoint an independent committee to advise on the bids.