Thursday, July 1, 2010

Parkway Takeover Saga

Battle between Fortis Healthcare (India) and Kazanah (Malaysia)
Sorry for the late reply, I have not been honestly keeping track on this since its overpriced deal. 
But now it is interesting to relook now that some situations have unfold.


  • Parkway is Asia's largest healthcare operator with 16 hosiptals and 3400 beds in Asia
  • 60% of revenue is derived from Singapore operations
  • Parkway also owns 31% of Pantai (Khazanah and Parkway JV) which has 2 Malaysian healthcare concessions. This 31% was subsequently took private and swapped with 40% stake in Pantai Irama which bought Pantai private. Khazanah than owns 60% of the end parent entity, Pantai Irama
  • Parkway also owns 35.4% of parkway Life REIT
  • 11 March, Fortis bought 23.9% stake in Parkway Holdings at S$3.56/sh for S$959.4 mn from TPG's exit
  • Fortis owns 25.4% currently and Khazanah owned 23%
  • May 27, Kazanah offered S$1.18 bn (US$ 835 mn) or S$3.78/sh with 25% premium to double its stake to 51.5% (partial offer)
  • Parkway’s shares surge 23% to S$3.71 (highest since Nov. 5, 2007)
  • Fortis shares rose 0.4% to 140.45 rupees
  • Fortis ups stake from 23.9 to 25.29% from March to May 2010
  • 9 June, Fortis plans to raise 27.5 bn rupees (US $ 585 mn)
  • Fortis’ board approved increased borrowing limit to 60 bn rupees (US$ 1.27 bn), including selling 22.35mn preferred shares including a 7% stake of 3.8 bn rupees to GIC (Govt of Singapore invest corp) 
  • Parkway climbs 1.6% to S$3.83 and Fortis down 0.7% to 139.5 rupees
  • 18 June, Reliance reportedly eyeing 26% stake in Fortis (Rumour)
  • Fortis needs to submit general offer for Parkway by July 30
  • 30 July Fortis submits general offer of S$3.80 /sh general offer for all shares
  • Other regional competitors include Pantai, Apollo Hospital and IMU health Sdn Bhd
  • From the looks of it, Fortis can raise estimated 87.5bn rupees or S$ 2.63bn
  • Malaysia is the crown jewel of Parkway's overseas operations but Pantai Irama remains the key to unlocking shareholder value and can be a stumbling block to Fortis 
  • Singapore takeover rules do not allow Fortis to make a partial general offer for Parkway shares as it (Fortis) had acquired shares in the target company within the last six months
  • That would cost Fortis some S$3.4bil (US$2.4bil) to buy out all the remaining shares in Parkway that it does not own
  • Expected counter offer at 5-6% premium at most (given the limited fund raising from Fortis), implying at best S$4/sh bid price



Another takeover in process.

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