PETALING JAYA: It will be difficult for India’s Fortis
Healthcare Ltd to secure the support of Government of Singapore
Investment Corp Pte Ltd (GIC) to make a counter bid for Parkway
Holdings Ltd as the sovereign fund’s mandate is strictly to invest
in companies outside the republic, sources said.
GIC declined comment on this issue. News reports in the Indian
media stated that Fortis has secured the “tacit support of GIC” to
make a counter-offer for Parkway.
GIC bought a 6.5% stake in Fortis in early May for US$85mil and
invested a further US$95mil through convertible foreign currency
bonds issued by Fortis. At the current price, a conversion of those
bonds will increase GIC’s holding in Fortis to over 13%.
“But for GIC to be seen as helping Fortis to buy over Parkway, a
Singapore-based and listed healthcare group, it would run counter
to the fund’s mandate of only investing out of Singapore,” said a
party familiar with the situation.
To recap, last week Khazanah Nasional Bhd’s Integrated
Healthcare Holdings Ltd has made a partial offer for Parkway.
Fortis currently has a 25.3% stake in Parkway and plans to use
the company as a vehicle to realise its dream of building a leading
global healthcare chain.
Integrated Healthcare together with parties acting in concert
have a 24.1% stake and would effectively control Parkway with a
51.5% stake should the offer be successful.
Singapore-based analysts told StarBiz they have not
heard of any counteroffer nor if GIC would fund any
counteroffer.
The analysts were also not clear if institutional shareholders
were inclined to accept the offer by Khazanah.
However, at least two research houses said the offer by Khazanah
was fair and hence recommended shareholders to accept it.
“We expect possible counter offers from Fortis and remain
negative on the deal as this could result in aggressive bidding by
both Khazanah and Fortis, driving Parkway’s share price ahead of
its underlying business fundamentals,” wrote Yew Kiang Wong, an
analyst with CLSA in Singapore and said investors should sell.
Su Tye Chua, an analyst at Credit Suisse in Singapore, wrote in
a report yesterday: “We do not rule out a potential counterbid
(from Fortis) but given the strong outperformance of Parkway’s
shares, limited near-term catalysts and significantly reduced
liquidity, we think investors should accept Khazanah’s offer,
should the shares trade near S$3.75 each.”
Integrated Healthcare appointed DBS Bank Ltd, Oversea-Chinese
Banking Corp and United Overseas Bank Ltd as joint lead arrangers
of financing for the Parkway offer.
Parkway’s share price jumped 22.85% from its closing price of
S$3.02 on May 26 to close at S$3.71 yesterday. For the year, it is
up 26.62%.
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