The Fortis management might have to finalise its counter-bid plans soon if Singapore-based Parkway Holdings’ share price remains close to what has been offered by Malaysia’s Khazanah Nasional Bhd to acquire majority stake in Asia’s largest healthcare chain.
For, the share price has surged in the expectation of a counter-offer from Fortis. If investors feel this is not likely, the share price of Parkway – S$ 3.69 a share on June 1 – is expected to fall. Which would make the conditional offer of Khazanah, to acquire 51.5 percent stake in Parkway for S$3.78 a share, attractive to many and lead to a sudden offload of stocks, analysts say.
Investment advisors are known to have recommended shareholders to accept the offer, which led to the surge in Parkway’s share price.
Khazanah’s offer was 25 per cent more than Parkway’s closing level of S$3.02 on May 26.
In addition, some directors of Parkway have actually begun to trade their shares in the open market. While Fortis promoter Shivinder M Singh accumulated some stocks, Foo Moh Lee and Kwok Khoon Robert, directors of some Parkway subsidiaries, offloaded some of their shares today. Ho Kian Guan, a Parkway director, has purchased 30,000 shares from the open market, Parkway informed Singapore Stock Exchange.
Parkway shares had jumped 27 per cent to close at S$3.71 yesterday after Khazanah announced its plans to increase stake in Parkway from 23.2 percent to 51.5 percent through a conditional open offer last week.
Analysts expect Fortis to offer a premium of five to six per cent over Khazanah’s offer price to make it attractive for shareholders. “The counter-offer should be not be below S$4.01 a share,” a Mumbai-based analyst said.
Khazanah is expected to announce the date of its open offer within two weeks, analysts say.
Fortis, which holds just over 25 per cent stake, has control over Parkway’s management, with group chairman Malvinder Mohan Singh recently joining as Parkway chairman.
Integrated Healthcare, Khazanah’s arm that makes investments in healthcare businesses, has already appointed DBS Bank, Overseas Chinese Banking Corporation and United Overseas Bank as joint lead arrangers for financing the Parkway offer.