The new offer values Fortis hospital business about 21 percent higher at 60.61 billion rupees ($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.

The old offer met with disapproval from shareholders including major Indian equity investor, Rakesh Jhunjhunwala, the Economic Times newspaper reported.

Manipal said as per the new offer, existing Fortis shareholders will roughly own half of the new company.

Under the previous terms, Manipal Chief Executive Ranjan Pai would have owned about 38 percent of the new company, which would be listed on Indian stock exchanges. U.S. buyout firm TPG was expected to hold 20.7 percent.

Manipals statement on Tuesday did not mention how much of the new company Pai or TPG would own.

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, Pai said.

Fortis shares were trading down 0.2 percent as of 0437 GMT after having risen as much as 3.6 percent early in the session.

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.

For Manipal, a deal would mean greater access to Indias burgeoning healthcare market, estimated by Deloitte to grow three-fold to $372 billion by 2022.

Private Indian healthcare companies have grown rapidly in recent years, boosted by increasing demand for better healthcare in an under-resourced public health system.

Manipal also said on Tuesday it expects to buy a 30.9 percent stake in Indian diagnostics chain SRL Ltd, which is partly owned by Fortis. Manipal plans to fold SRL into the new company.

Source : India today