Khazanah offers S$3.5b for Parkway

Published: 2010/07/26Share3 PDF


Khazanah Nasional Bhd, Malaysia’s sovereign wealth fund, offered S$3.5 billion (US$2.6 billion) for the rest of Singapore’s Parkway Holdings Ltd, topping a bid by Fortis Healthcare Ltd for Asia’s biggest hospital operator.



Khazanah offered S$3.95 a share in cash for the 76.1 percent it doesn’t already own of Parkway, the Kuala Lumpur- based fund said in a statement today. That’s 3.9 percent more than the S$3.80-a-share bid by New Delhi-based Fortis on July 1.



Buying Parkway would give Khazanah full ownership of 16 additional hospitals in eight Asian nations, adding to its stakes in India’s Apollo Hospitals Enterprise Ltd and IMU Health Sdn Bhd in Malaysia. The buyout would hinder the expansion plans of Malvinder and Shivinder Singh, who run Fortis. The billionaire brothers are seeking to tap health-care markets in Asia, which are expanding as much as 17 percent annually.



Fortis, holder of about 24.9 percent of Parkway, said it will accept the proposal. The offer, which values Parkway at about S$4.5 billion, closes on Aug 16.





“Fortis feels that there are more attractive opportunities to pursue its goal of building a pan-Asian health care delivery network,” the company said in an e-mailed statement, adding that it will study the secondary listing of Fortis on the Singapore exchange.



Fortis shares increased as much as 2.6 percent to 162.4 rupees in Mumbai trading, and were 1.2 percent higher at 160.1 rupees at noon local time. Parkway shares, halted at the request of Khazanah today, were unchanged at S$3.88 on July 23 at the 5 p.m. close of trading on the Singapore exchange.



Gleneagles, Mount Elizabeth



Parkway has more than 3,400 hospital beds in China, India and Malaysia among other Asian countries, according to its website. In Singapore, the group’s operations include the Gleneagles and Mount Elizabeth hospitals, both located close to the central Orchard Road shopping belt. It also manages a real estate investment trust and provides health-care education.



Khazanah, which was advised by CIMB Bank Bhd and Deutsche Bank AG, offered S$3.78 a share, or S$1.18 billion, on May 27 to more than double its stake in Parkway to 51.5 percent.



The new offer values Parkway at about 28 times 2010 estimated earnings, according to Bloomberg calculations, based on an average per-share estimate of 13.9 Singapore cents. Raffles Medical Group Ltd., Parkway’s biggest Singapore-based competitor, trades at 22 times, according to Bloomberg data.



Parkway reported a 10 percent gain in first-quarter net income to S$25.8 million, helped by an increase in foreign patients at its hospitals in Singapore. Revenue advanced 8 percent to S$247.6 million in the period.



Chief Executive Officer Tan See Leng said in February that Parkway may make acquisitions in China to tap rising demand for health care in the world’s most populous nation.



Bloomberg


http://www.btimes.com.my/Current_News/BTIMES/articles/20100726112825/Article/index_html