Fortis Healthcare and its promoters, the Singh brothers, on Thursday joined a takeover battle for Parkway Holdings with a $3.1 billion counter-bid to buy out all of the Singapore hospital operator’s shares, topping a rival offer by Malaysia’s state wealth fund Khazanah.
The Malvinder and Shivinder Singh-controlled Fortis had bought a 25 per cent stake in Parkway Holdings in March for $685.3 million, but Khazanah matched with its own stake.
However, significantly, Fortis’ latest bid at 3.80 Singapore dollars per share is just two cents above the S$3.78 offered by Khazanah, prompting speculation the Singh brothers seemed open to exit with a rich cash profit if offered the right price.
Khazanah, which owns less than 24 per cent stake in the hospital chain, made a surprise $835 million partial offer to lift its stake to 51.5 percent. It is a $28-billion entity with assets centred on healthcare, telecoms and financial services.
“The offer represents a 25.8 percent premium over the closing price on May 26, the day prior to the announcement of the partial offer by Khazanah Nasional Berhad," Fortis said in a statement.
The brothers intend to make Fortis a subsidiary of Parkway Holdings and future expansion plans would be carried with Parkway as the main vehicle.
“This would create a single entity of optimum scale and size to drive productivity. It would optimise growth and capabilities,” Malvinder Singh said in a conference call.
Parkway and Fortis together have 68 hospitals, 12,000 hospital beds, 20,000 employees, 3,5000 doctors. Their combined revenues stand at $1 billion.
The scions of the family that founded pharmaceuticals 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.
Khazanah declined comment on Fortis' offer. Khazanah’s $28 billion in assets are concentrated in South East Asian financials, healthcare and telecoms.