China's Fosun Pharma raises offer for hospital chain Chindex Int'l to $223.6 mln

SHANGHAI, April 21 Mon Apr 21, 2014 5:18am EDT

SHANGHAI, April 21 (Reuters) - Chinese drugmaker Shanghai Fosun Pharmaceutical Group Co Ltd has raised its offer for U.S.-listed Chindex International Inc by 15 percent to $223.6 million after a bidding war for the China-focused hospital chain.

The Chinese firm increased its offer to $24 per share from its original $19.50 per share, after an unidentified bidder offered $23 per share in a "superior proposal" earlier this month, according to a filing to the Shanghai Stock Exchange on Monday.

Fosun had earlier offered to pay from $193.7 million for Chindex.

The acquisition would help Fosun Pharmaceutical increase its access to China's fast-growing private healthcare market. The government is keen to promote investment in the sector to support overburdened public hospitals and bring prices down through increased competition.

Chindex runs the premium-end United Family Healthcare hospital chain in China.

The offer marks a 4.6 percent premium to Chindex's Friday close of $22.94, and values the company at $434.4 million based on 18.1 million outstanding shares as of March 11.

Fosun Pharmaceutical will invest up to $223.6 million to become the largest shareholder in Chindex International and up to $45 million for a 30 percent stake in its medical equipment supplier unit Chindex Medical Ltd, the statement said.

In February, Fosun Pharmaceutical and private equity firm TPG made the original offer to take Chindex private. The deal would see Fosun increase its stake to 48.65 percent from 17.45 percent, while TPG would hold 48.14 percent. Chindex founder Roberta Lipson would retain a 3.21 percent stake.

China's healthcare sector is estimated to hit $1 trillion by 2020, according to McKinsey & Company, but is bogged down by rampant corruption, skills shortages and fragmentation.

Fosun Pharmaceutical's Shanghai-listed shares closed down 1.17 percent on Monday, slightly ahead of the benchmark CSI 300 Index which was down 1.67 percent. (Reporting by Adam Jourdan; Editing by Miral Fahmy)