Fortis Healthcare has bought more shares in hospital operator Parkway Holdings, setting the stage for a possible battle with Malaysian state investor Khazanah for the Singapore firm.
Fortis bought an additional 350,000 Parkway shares at an average price of S$3.1477 on the open market, raising its stake to 25.37 per cent from 25.34 per cent, Parkway said in a disclosure statement to the Singapore Exchange on Monday.
The purchase took place last week before Khazanah, which also owns about a quarter of Parkway, made a $835 million offer to gain majority control of the Singapore firm.
Analysts are speculating Fortis may make a counterbid for Parkway. Khazanah’s unexpected offer last week to lift its stake to 51.5 per cent may force Fortis’ hand and make a takeover more expensive. Parkway shares jumped 25 per cent after the Khazanah offer.
“Raising funds may not be a problem for Fortis, but it makes little sense to go in for such a huge fund-raising and stretch your balance sheet,” said Sapna Jhawar, an analyst at brokerage Sharekhan. “The alternative and better option for Fortis at this point of time is to buy out other minority shareholders so that they remain in contention and not shell out too much cash.”
Meanwhile, Fortis has been legally advised to keep silent on the Parkway issue for now, managing director Shivinder Singh said on a conference call on Monday.
Parkway shares reached S$3.79 a share on Monday, above Khazanah's S$3.78 offer, their highest level since November 2007, before dipping to S$3.72.