Tuesday July 27, 2010
NEW DELHI: Fortis Healthcare, in accepting Khazanah Nasional Bhd’s offer yesterday, said it would use the S$116.7mil profit on its Parkway stake to look for other opportunities.
“At the end of the day, you have to take an economic call. You can’t take an emotional call on the assets you want to own,” Fortis managing director Shivinder Singh told reporters in New Delhi.
Shares in Fortis had surged more than 6% in Mumbai just ahead of Khazanah’s confirmation.
The billionaire Singh brothers Shivinder and Malvinder, heirs to Ranbaxy Laboratories which was built by their grandfather and they later sold to Japan’s Daiichi Sankyo, have ambitions to build their healthcare business in a series of deals.
Malvinder said Singapore would be the company’s hub for international expansion.
Parkway shares were suspended yesterday pending the announcement by Khazanah and closed at S$3.88 on Friday. The price of S$3.95 would be the highest for its shares since October 2007.
“This is a good price for investors to cash out,” said Lynette Tan, an analyst at DMG & Partners in Singapore, referring to the offer price.
“The change in ownership won’t make much difference to Parkway’s future growth strategy or operations because Khazanah was already a large shareholder,” Tan said.
Nomura Securities said that the deal valued Parkway at 31 times 2010 earnings against peer Raffles Medical’s 22 times.
Yogesh Sareen, chief financial officer of Fortis, said the company would be debt-free following the sale of its stake in Parkway and would have free cash reserves of nine billion rupees post-Parkway deal.
“The cash will not be kept lying. We will look for acquisition opportunities in South-East Asia and the Middle East,” he said. — Reuters
http://biz.thestar.com.my/news/story.asp?file=/2010/7/27/business/6739109&sec=business
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