Fortis offers to buy Parkway, deal size at $2.3 bn
By IANSThursday, July 1, 2010
NEW DELHI - India’s Fortis Healthcare and its promoters jointly launched a bid to buy all the shares of Singapore’s Parkway Holdings, which operates 16 hospitals in the Asia-Pacific region, in a deal valued around $2.3 billion (S$3.2 billion).
The bid by Fortis topped an earlier rival bid by Malaysian state fund, Khazanah Nasional Berhad, which owns about 24 percent in Parkway Holdings. It had made a partial takeover offer for the company’s shares at Singapore S$3.78 per share, in a bid to take its stakes up to 51 percent.
Fortis Healthcare, promoted by brothers Malvinder and Shivinder Singh, had in March bought a 24-percent stake in Parkway Holdings for $685.3 million, but has been involved in a battle with Khazanah for control over the hospital chain.
“RHC Healthcare, a company jointly owned by RHC Holding Private Ltd., the holding company of Malvinder Mohan Singh and Shivender Mohan Singh, and Fortis Healthcare have announced a voluntary general offer for Parkway Holdings at an offer price of S$3.8 per share in cash,” said a statement from Fortis Healthcare.
“The offer represents a 25.8 percent over the closing price on May 26, the day prior to the announcement of the partial offer by Khazanah Nasional Berhad,” the statement added.
Post a successful bid, Fortis might become a subsidiary of Parkway holdings, with the group’s activities and expansion plans into other countries being led under the Parkway banner, the promoters told repoters in a conference call.
The erstwhile promoters of pharma giant Ranbaxy said that under Singapore stock exchange laws the open offer by Fortis could only be successful if they managed to get another 25 percent odd shares, taking their total stake in Parkway to 50 percent.
The brothers also said the network of hospitals and infrastructure of both companies, Fortis and Parkway put together, would create the largest healthcare service provider in Asia.
“We are talking about 12,200 plus beds between the two systems. We are talking about 20,000 plus employees between the systems, over 3,500 doctors, with a combined revenue of $1 billion,” said Malvinder Singh, chairman, Fortis Healthcare.
According to a chief executive of a leading stock broking firm, who did not want to be named, the fight for Parkway may intensify as Khazanah was largely expected to come up with a counter offer to Fortis and the Singh brothers would have to shell out much more than the open offer of S$3.8 per share.
Among the brothers’ big ticket deals include buying out 10 hospitals from Wockhardt in India for $180 million and the sale of the family’s 34.8-percent stake in pharmaceuticals major Ranbaxy Laboratories to Japan’s Daiichi Sankyo for $2.4 billion.
At the Bombay Stock Exchange, the Fortis scrip rose 3.3 percent touching the intra-day high of Rs.157.35 and ended the day at Rs.154.10, a 1.22 percent gain from Wednesday’s close.
