Parkway Majority yet to accept Khazanah offer

Fortis bid played a spoiler to the shareholders

The majority of shareholders of Parkway Holdings, the Singapore-based healthcare provider, had not accepted the buy offer of Khazanah Nasional Berhad, the Malaysian government’s investment arm, till yesterday.

Yesterday was the first closing date for Khazanah’s offer to acquire 51.5 per cent of Parkway shares at S$3.78 (Rs 127.5) each. It was, therefore, extended until July 26. The fact that a majority hadn’t accepted it was informed by Khazanah today.

The offer turned less attractive after the promoters of India’s Fortis Healthcare, brothers Malvinder and Shivinder Singh, who have management control over Parkway due to Fortis’ 25 per cent stake in the Singapore company, made a $2.3 billion (Rs 10,700 crore) counter-offer to acquire all the remaining shares. Fortis’ offer price for a single Parkway share is S$3.8 (Rs 128).

Khazanah is expected to revise its offer price soon.

In a disclosure to Singapore Stock Exchange (SGX), Khazanah said it had got 592,577,825 valid votes from Parkway shareholders on the partial offer (till July 8), which represented approximately 68.6 per cent of the total number of Parkway shares that Khazanah does not own. While 294,507,295 votes or 49.7 per cent were in favour of the partial offer, 298,070,530 votes or 51.3 per cent were against the offer, it stated.

The battle for control over Parkway began on May 27, after Khazanah announced a conditional offer to acquire 51.5 per cent of the company’s shares. After which, Fortis and its founding family announced a counter-offer.

Fortis became the largest shareholder in Parkway after it acquired 23.9 per cent in it for S$959 million (Rs 3,000 crore) from US investment firm TPG Holdings in May. The company later increased its stake to 25.3 per cent through open market purchase of shares.

Parkway Holdings has a network of 16 hospitals, with a little over 3,400 beds. It runs hospitals in Singapore, Malaysia, Brunei, India and China. In addition to Fortis and Khazanah, prominent shareholders of Parkway are investments firms Bank of New York Mellon Corporation, Newton Investment Management Ltd and Franklin Resources Inc.