Khazanah buys time for Parkway offer

Friday July 9, 2010




By RISEN JAYASEELAN

risen@thestar.com.my





Offer period extension to July 26 may be prelude to higher bid



PETALING JAYA: Khazanah Nasional Bhd’s decision to extend the period of its partial offer for Parkway Holdings Ltd is a prelude to the government investment fund making a higher bid, analysts said.



“It is the next logical move. Khazanah should be raising its partial offer price higher than what Fortis (Healthcare Ltd) has offered but to do that it cannot afford to let its offer lapse as then it can only launch another bid after six months,” a Singapore-based analyst said.



Yesterday afternoon, Khazanah extended its partial offer for Parkway (which expired at 5pm yesterday) until July 26. It, however, did not raise its offer price as the market had been expecting. Khazanah’s advisers, CIMB Bank Bhd and Deutsche Bank, said further extensions of the offer might be announced from time-to-time. Fortis is being advised by Macquarie.



Khazanah, which needs 313 million shares for the offer to succeed and to bring its shareholding in Parkway up to 51.5% from 23% currently, said it had received acceptances from shareholders who hold only 14.19 million shares.



Khazanah’s partial offer announced in late May was at S$3.78 a Parkway share, while Fortis subsequently made a voluntary general offer for all Parkway shares it does not own at S$3.80 apiece on July 1. Fortis owns 25.37% in Parkway.



A source familiar with the situation added that Khazanah may be choosing to wait for Fortis to release its offer documents to shareholders later this month before it (Khazanah) can make a final judgment on its next move.



Another analyst said that the ensuing battle at Parkway between Khazanah and Fortis was akin to a poker game.



“Khazanah could now up the price of its offer and Fortis can do the same, considering that its (Fortis’) first offer of S$3.80 does not look like its last price. But at some point, either party may chose to sell out to the other,” the analyst commented.



Yesterday, Bloomberg reported, quoting sources, that Khazanah had started talks with five banks for loans that would enable it to increase an offer for Parkway. The report said Khazanah told the banks it may need to borrow at least S$1bil.



Parkway is Asia’s largest hospital operator, which co-owns with Khazanah, the string of Pantai hospitals in Malaysia. Other hospitals in Singapore under Parkway include ParkwayEast Hospital, Gleneagles Hospital and Mount Elizabeth Hospital.



One of its prized assets is the planned S$1.5bil Parkway Novena Hospital, which is being built in Irrawaddy Road in Singapore, not far from upmarket Orchard Road. It is slated to commence operations either next year or in 2012.

http://biz.thestar.com.my/news/story.asp?file=/2010/7/9/business/6633869&sec=business