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Friday August 13, 2010

Khazanah has 64% acceptance level for Parkway

It has the necessary majority to take over Parkway

By TEE LIN SAY

PETALING JAYA: Khazanah Nasional Bhd had secured a 64.1% level of acceptances in its voluntary general offer (VGO) for the takeover of Singapore hospital group Parkway Holdings Bhd as at Tuesday.

While the actual closing is at 5pm on Monday, Integrated Healthcare Holdings Ltd (IHHL), which is an indirect wholly-owned subsidiary of Khazanah, has in effect gotten the necessary majority to take over Parkway at $S3.95 (RM9.25) per share.

Melvinder Singh

As at 5pm on Tuesday, IHHL had received 458.37 million shares, or 40.2%, of Parkway.

Sources said this also included Fortis Healthcare Ltd’s 23.9% stake in Parkway.

Taking into account the 269.83 million shares or 23.8% stake by Khazanah, this means that Khazanah already has a 64.1% acceptance level.

On July 26, Fortis told the Singapore Exchange that it had accepted IHHL’s higher cash offer of S$3.95 per share and said it would divest its entire stake in Parkway to the Malaysian government investment arm.

The deal will see Fortis’ billionaire brothers, Malvinder Singh and Shivinder Singh, walk away with a profit of S$116.7mil.

On July 27, in a filing to the Singapore Exchange, IHHL announced a revision of its partial offer to a VGO for all of the shares in Parkway.

Assuming there is full acceptance, Khazanah will end up forking out about S$3.4bil for the remaining stake it does not own.

Now that Khazanah has gained control of the much sought-after hospital group, comes the bigger task – which is to work up the assets and ensure bigger returns in the coming years.

Fortis made its entry into Parkway in March this year by purchasing a 23.9% stake in Parkway for a reported price of S$959mil (RM2.24bil) from US private equity fund TPG Capital.

Reports have quoted Fortis chief financial officer Yogesh Sareen as saying that the company would be debt-free following the sale of its stake in Parkway.

Yogesh added that Fortis’ current debt was 29.30 billion rupees, and its debt-to-equity ratio was 0.7. Fortis had maintained its stance that it would be a long-term player in the healthcare business.

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