Jul
27
Fortis Ends Bidding War Leaving Khazanah in Position to Buy Parkway
By Ben | Published July 27, 2010
On Monday July 26th 2010, Fortis Healthcare Ltd. rescinded its SGD 3.2 billion (USD 2.3 billion) offer to buy remaining Parkway shares, leaving the subsidiary of Malaysian sovereign fund Khazanah, Integrated Healthcare Holdings, free to purchase all outstanding Parkway Holdings shares.
Khazanah, through Integrated Healthcare, had originally offered SGD 1.18 billion (USD 835 million) to increase their stake in Parkway Holdings from 23.9 to 51.5% in May 2010. Fortis then offered SGD 3.78 (US2.71) per share for all remaining shares. However, since Fortis dropped their plans for taking over Parkway on Monday, Khazanah has offered SGD 3.5 billion (USD 2.57 billion) for all outstanding shares in Parkway, making it three times larger than their previous offer for a simple majority stake.
Fortis has come to an agreement with Khazanah to sell its 282.7 million share stake in Parkway at a price of SGD 3.95 (USD 2.9) per share, translating to a total of approximately SGD 1.12 billion (USD 822.3 million). The deal will give Khazanah the keys to the Parkway kingdom, which includes 16 hospitals throughout Asia, offering more than 3,400 beds in places like Singapore, China, Malaysia, Brunei and India.
Malvinder Mohan Singh, the Chairman of Fortis and Parkway said that “After considered and deliberate discussions, we have decided to divest our strategic stake in Parkway and have reached an agreement with Khazanah to accept their voluntary general offer. Our decision to exit our investments took into account the interest of all stakeholders of Fortis. It was made after careful assessment of the intrinsic value of Parkway and in light of other growth opportunities available to us across the region and globally.”
The offer made through Integrated Healthcare will close on August 16th, with a Director of Integrated Healthcare Holdings, Ahmad Shahizam Mohd Shariff, saying that “If our voluntary general offer is successful, then we will be able to achieve the vision we outlined when we launched our partial offer, to create Asia’s premier regional healthcare platform,”
Companies Mentioned:
Fortis Healthcare International
Founded in India in 1999, Fortis Healthcare International is a healthcare provider that currently operates 46 hospitals in India, which are organized as a hub and spoke model around their specialty hospitals. They offer laboratory, wellness, information technology, travel and financial services through the wholly owned Religare Enterprises Limited.
As Malaysia’s state investment company, Khazanah Nasional Berhad is responsible for managing the Malaysian Government’s investments as well as strategically investing in new sectors and markets. Khazanah Nasional was incorporated as a public limited company in September 1993 and started operations the following year. All shares are owned by the corporate body of the Minister of Finance Incorporated, except for one owned by Pesuruhjaya Tanah Persekutuan, the Federal Land Commissioner. Khazanah holds investments in more than 50 companies, including but not limited to companies engaged in aviation, banking, electronics, healthcare, manufacturing, and telecommunications.
First listed on the Singaporean stock exchange in 1975, Parkway Holdings has become one of the top-quality integrated healthcare providers in Asia in the intervening years. Parkway now operates 16 hospitals in Asia, with over 3,400 beds throughout Singapore, China, Malaysia, India, Brunei, and the UAE. Parkway also boasts a nursing and health science college, extensive diagnostic, imaging and laboratory resources and the largest foreign owned medical network in Shanghai.
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