Khazanah makes formal bid for Parkway

The battle for control over Parkway Holdings, the Singapore-based company that runs Asia’s largest hospital chain, is set to intensify as Malaysian investment firm Khazanah dispatched a formal offer today to the shareholders to acquire 51 per cent stake. The offer will close on July 8, Parkway told the Singapore Stock Exchange.

Yesterday, Fortis Healthcare, the largest shareholder in Parkway, had announced its readiness to raise Rs 8,750 crore — Rs 2,750 crore from the security market and up to Rs 6,000 crore as debt. This was perceived by industry analysts as the first step towards a counter-bid to retain management control over Parkway.

In line with Singapore laws, Parkway had already appointed Morgan Stanley Asia (Singapore) Pte as independent financial advisor on the issue. The recommendations of Morgan Stanley, as well as that of Parkway’s independent directors, with regard to the open offer will reach shareholders in two weeks.

Anticipating a counter-bid, Parkway shares gained 2.65 per cent today to close at S$3.87 on the Singapore Stock Exchange. The closing share price was higher than Khazanah’s offer price of S$3.78 a share.

Through the offer, Khazanah intends to increase its stake in Parkway from the current 23.32 per cent to 51.5 per cent, by purchase of 313 million shares.

Fortis became the largest shareholder in Parkway only last month, after it acquired 23.9 per cent in Parkway for S$959 million (Rs 3,000 crore). The company increased its stake to 25.3 per cent through a later open market purchase of shares.

Fortis shares closed marginally lower at Rs 139.85 on the Bombay Stock Exchange today.

Parkway Holdings runs a network of 16 hospitals, of about 3,400 beds, in Singapore, Malaysia, Brunei, India and China.