After ace investor Rakesh Jhunjhunwala, along with other shareholders, questioned the contours of TPG-backed Manipal Hospitals' deal with Fortis Healthcare to buy its hospital business, Manipal came up with a revised deal, raising its offer by about a fifth in an attempt to win over minority shareholders. Several minority shareholders had reportedly opposed to the deal. Rakesh Jhunjhunwala, although stated, there is no question of opposing the deal, he expressed his doubts publically.

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“There is no question of opposing,” Jhunjhunwala told ET earlier this month. “First, let a stage come when the deal needs to be opposed. Today, it’s just an announcement. The board doesn’t have the power to do the deal…I think the stage where the deal will need to be voted upon will not come at all…A lot of shareholders have got in touch with me. I’ve given them the same views,” Jhunjhunwala added. 
 
The new offer by Manipal values Fortis' hospital business about 21 per cent higher at Rs 60.61 billion ($933.3 million), or 116 rupees per share, Manipal Hospitals said in a statement late on Tuesday.
 
Manipal first offered to buy Fortis last month in a deal that would combine its 14 hospitals with Fortis' portfolio of 34 hospitals, creating a 150 billion rupees company and formidable rival to Apollo Hospitals Enterprise Ltd.
 
But the previous bid, which offered shareholders 10.83 shares in the combined company for every 100 Fortis shares held, was panned by investors. It knocked Fortis stock down 14 percent on the day the deal was announced and prompted Chief Executive Bhavdeep Singh to make conciliatory comments about keeping minority shareholders' concerns in mind.
 
Manipal said as per the new offer, existing Fortis shareholders will roughly own half of the new company.
 
"We hope that our revised offer addresses the concerns certain Fortis shareholders had raised and believe this offer is in the interests of all stakeholders, including Fortis' shareholders," Manipal Chief Executive Ranjan Pai said.

A deal will take some pressure off Fortis, which has been under a cloud as authorities investigate whether its founders, brothers Malvinder Singh and Shivinder Singh, who are no relation to the CEO, took funds from the company. The brothers have denied the allegations.
 
Meanwhile, Ratings agency ICRA has downgraded Fortis Healthcare and its subsidiaries Escorts Heart Institute and Research Centre, Fortis Hospitals and Hiranandani Healthcare, citing stretched liquidity position of the company which led to delay in servicing of a loan.
 
The long term rating of Fortis Healthcare Ltd (FHL) for Rs 250 crore non-convertible debenture programme, Rs 105 crore fund-based limits, and Rs 195 crore term loans has been revised to 'C' from BBB, ICRA said in a statement.
 
'C' rating reflects very high risk of default regarding timely servicing of financial obligations as against moderate degree of safety regarding timely servicing of financial obligations for 'BBB', as per ICRA.

(With inputs from agencies)